McLaughlin Equipment Company, Inc. v. Newcourt Credit Group, (S.D.Ind. 2004)

Full title: McLAUGHLIN EQUIPMENT COMPANY, INC., Plaintiff, v. NEWCOURT CREDIT GROUP…

Court: United States District Court, S.D. Indiana, Indianapolis Division

Date published: Feb 18, 2004

No. IP98-0127-C-T/G (S.D. Ind. Feb. 18, 2004)

Opinion

No. IP98-0127-C-T/G.

February 18, 2004.

ENTRY DISPOSING OF PENDING MOTIONS ¹

1 This Entry is a matter of public record and may be made available to the public on the court's web site, but it is not intended for commercial publication either electronically or in paper form. Although the ruling or rulings in this Entry will govern the case presently before this court, this court does not consider the discussion in this Entry to be sufficiently novel or instructive to justify commercial publication or the subsequent citation of it in other proceedings.

JOHN TINDER, District Judge

The Plaintiff McLaughlin Enterprises, Inc. ("McLaughlin") is a former dealer and distributor of Carpenter school buses in North Dakota, South Dakota and parts of Minnesota and Montana. McLaughlin sued Carpenter, Bert SerVaas, and others in federal district court in Minnesota. The Minnesota court transferred the case to this district, and thereafter McLaughlin amended its complaint, adding as Defendants Newcourt Credit Group, Inc.; Newcourt Financial, Ltd.; and Newcourt Financial USA, Inc. (collectively "Newcourt"). McLaughlin brings the following claims against Newcourt: federal and Minnesota antitrust claims, claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), common law fraud claims, claims under various state dealer and franchise statutes, breach of fiduciary duty, tortious interference and breach of a duty of good faith and fair dealing. The following are pending: (1) the Defendants' Motion for Summary Judgment, (2) the Plaintiff's Motion for Partial Summary Judgment, (3) the Defendants' Motion to Strike McCutcheon Opinions, (4) the Defendants' Motion to Strike, (5) the Motion to Strike the Defendant's Objections in Reply to Plaintiff's statement of Additional Material Facts, (6) the Defendants' Objection to Plaintiff's Surreply to Motion for Summary Judgment and Plaintiff's Statement of Additional Material Facts and Evidence on Surreply, and (7) two motions for oral argument. This entry addresses all of these. I. BACKGROUND ²

2 These undisputed background facts are taken from the parties' Rule 56.1 factual assertions where supported by specific citation to evidentiary materials and substantiated by the cited materials as well as the procedural history of the case. Additional facts may be provided as necessary in the discussion portion of the entry.

McLaughlin was a distributor for Carpenter school buses from 1966 to 1996. As a distributor, McLaughlin had exclusive territories, which varied from time to time. Carpenter and McLaughlin entered into written distributorship agreements in the course of their business relationship. The last written distributorship agreement covered the time period of January 1, 1994, to January 1, 1995. This agreement expired by its own terms on January 1, 1995, and McLaughlin had no written distributorship agreement with Carpenter thereafter. However, McLaughlin and Carpenter continued to do business together. McLaughlin competed with dealers for Thomas, Bluebird, Wayne and AmTran buses. In addition to selling school buses, McLaughlin also sold boats, recreational vehicles, snowmobiles, and all-terrain vehicles from its facility in Fargo, North Dakota.

In June 1991 Carpenter requested that McLaughlin keep its gross profit on sales of Carpenter school bus bodies at $500. McLaughlin refused to comply with this request. Carpenter did not ask McLaughlin to keep its gross profits at any specified level subsequent to June 1991. Carpenter terminated McLaughlin's Carpenter distributorship in the eastern part of Minnesota, in what McLaughlin refers to as the "prime Minnesota markets," effective August 26, 1992. Newcourt had no involvement in this termination of the distributorship in the prime Minnesota markets. McLaughlin claims that its Carpenter dealership in the prime Minnesota markets was terminated by Carpenter in part because McLaughlin refused to restrict its resale prices.

On June 30, 1994, Newcourt and Carpenter entered into an Operating Agreement pursuant to which Newcourt was to provide the exclusive source of floor plan financing offered by Carpenter to its distributors and customers. In March 1995, Terry Whitesell, Carpenter's Vice President of Sales, wrote to all Carpenter distributors indicating that the establishment of the Newcourt floor plan was "essential regardless of [their] intention to use." (Goldsmith Aff., Ex. 8.) Carpenter dealers with Newcourt floor plans could pay for their buses when they picked them up with their own money or with funds borrowed elsewhere, from, for example, their local banks.³

3 McLaughlin's Response to Statement of Material Facts No. 32 denied this assertion. The response cited the Goldsmith Affidavit, Exhibits 16 and 22, the latter which is the deposition of Hi Tillery, Exhibit 404 as evidentiary support for its denial. The nonspecific citation to Exhibit 16 (employment records of Timothy Durham) in its entirety, which exhibit consists of numerous pages, is improper. Also, Exhibit 16 does not appear to contain anything to contradict Newcourt's assertion. As explained infra, Exhibit 404 to the Tillery deposition is inadmissible hearsay and thus fails to raise a genuine issue of fact.

In April 1995, Tim Durham of Carpenter and David Hodgson of Newcourt wrote to McLaughlin that obtaining a Newcourt floor plan "credit line will become mandatory to maintain your distributorship after your current contract expires." ( Id., Ex. 12.) In July 7, 1995, Durham wrote McLaughlin stating that he had instructed the Sales Department that Carpenter was to accept no orders without his explicit approval from any distributor who has not completed the documentation stage of the Newcourt floor plan process. (Goldsmith Aff., Ex. 13.) In August 1995, Carpenter sent a facsimile transmission to McLaughlin stating that its orders were being held pending compliance with the July 7, 1995, letter from Tim Durham. ( Id., Ex. 4.)

On December 20, 1995, Durham wrote McLaughlin stating that the Newcourt floor plan arrangement was a requirement for buses while they were on Carpenter property. The letter also indicated that given McLaughlin's decision not to pursue the floor plan, Carpenter would no longer issue competitive allowances of any school buses quoted by McLaughlin from Carpenter until the expiration of the current distributorship contract and that the contract would not be renewed if McLaughlin was not on the Newcourt floor plan at the expiration of the contract. ( Id., Ex. 3.) In May 1996, James Cochran of Newcourt represented to Tim McLaughlin that if McLaughlin signed up for the Newcourt floor plan, then he would get his buses in a timely manner. (McLaughlin Dep. at 110-13, 141-42, 380.) McLaughlin never entered into a floor plan agreement with Newcourt. McLaughlin's distributorship relationship with Carpenter ended, at the latest, in July 1996.

The Plaintiff filed its complaint against Carpenter and others as Cause Number 4-96-639 in the United States District Court for the District of Minnesota (the "Minnesota action") on July 25, 1996. The complaint alleged, inter alia, that McLaughlin had been "constructively terminated" as a Carpenter dealer and that Carpenter had violated Minnesota Statute §§ 325D.03.04.

On January 30, 1998, the United States District Court for the District of Minnesota transferred the Plaintiff's claims in the Minnesota action against Beurt SerVaas and SerVaas, Inc. to this court, pursuant to 28 U.S.C. § 1406, for lack of personal jurisdiction. On November 16, 1998, the Plaintiff filed a Motion to Amend its Complaint, seeking in part to add claims against Newcourt. The court granted that motion on September 9, 1999, and the Plaintiff filed its Amended Complaint, adding claims against Newcourt on September 15, 1999.

McLaughlin alleges that Newcourt engaged in a conspiracy with Carpenter and others. The alleged conspiracy included the June 1991 request by Carpenter that McLaughlin keep its gross profits on sales of Carpenter school bus bodies at $500. The Plaintiff alleges that Newcourt violated federal and state antitrust laws. It is alleged that Newcourt violated the Minnesota Act Against Unfair Discrimination and Competition, the Minnesota Franchise Act, the Minnesota Motor Vehicle Sale and Distribution Act, the Montana Sales and Distribution of Motor Vehicles Act, a provision of the North Dakota Century Code, and provisions of the South Dakota Motor Vehicle Dealers Act, resulting in injury to McLaughlin while a Carpenter dealer because of its constructive termination as a Carpenter dealer. The Plaintiff also claims that Newcourt violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. by, inter alia, aiding, abetting, and ratifying the conduct of an alleged Carpenter-Rost-Minnesota Body ("C-R-MB") enterprise which resulted in the termination of McLaughlin's Carpenter dealership in the prime Minnesota markets as of August 26, 1992. It is alleged that Newcourt committed fraud, breached its fiduciary duty, tortiously interfered with business relations, and breached its duty of good faith and fair dealing.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate when the record shows "that there is no genuine issue as to any material fact and that [a] moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding whether a genuine issue of material fact exists, the court construes all facts in the light most favorable to the nonmoving party and draws all reasonable in favor of that party. See id. at 255.

A party moving for summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. A party moving for summary judgment on a claim on which the nonmoving party bears the burden of proof at trial may discharge its burden by showing, "that is, pointing out" an absence of evidence to support the nonmoving party's case. Id. at 325. To survive a motion for summary judgment on a claim on which it bears the burden of proof, however, a party must produce sufficient evidence to show the existence of each element of its case on which it will bear the burden of proof at trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986).

Summary judgment should be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. Federal Rule of Civil Procedure 56(d) permits partial summary judgment when judgment is not rendered upon the whole case. Fed.R.Civ.P. 56(d).

III. PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

McLaughlin moves for partial summary judgment on several defenses asserted by Newcourt, which the Plaintiff characterizes as affirmative defenses. Newcourt opposes the motion, but has withdrawn its defenses based on a lack of personal jurisdiction, failure to state a claim, estoppel, and failure to mitigate damages. Thus, Newcourt maintains the following defenses on which McLaughlin seeks summary judgment: statute of limitations, lack of standing, absence of damages and punitive damages are not recoverable.

An "affirmative defense" is a defense for which the defendant bears the burden of proof. See Publ'ns Int'l, Ltd. v. Landoll, Inc., 164 F.3d 337, 339-40 (7^th Cir. 1998). As a sister district court has explained: "Another way to look at it is that affirmative defenses are reasons why defendants are not liable even if they admit the facts alleged in the complaint." Native Am. Arts, Inc. v. The Waldron Corp., 253 F. Supp. 2d 1041, 1045 (N.D. Ill. 2003). Thus, of the remaining defenses challenged by the Plaintiff's motion for partial summary judgment, only the statute of limitations defense is an affirmative defense. See Fed.R.Civ.P. 8(c); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (holding that the party invoking the court's jurisdiction bears the burden of proving standing); Brewer v. Wal-Mart Stores, Inc., 87 F.3d 203, 209 (7^th Cir. 1996) (the party seeking punitive damages has burden of proving them); Schiller Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 415 (7^th Cir. 1992) (party seeking damages bears burden of proof); Native Am. Arts, 253 F. Supp. 2d at 1045 ("standing is not an affirmative defense").

Because McLaughlin bears the burden of proving its standing, damages, and punitive damages, it is insufficient for it simply to show that Newcourt's discovery responses fail to establish these matters. A party moving for summary judgment bears an initial burden of production. Justice Brennan explains this burden as follows:

The burden of production imposed by Rule 56 requires the moving party to make a prima facie showing that it is entitled to summary judgment. The manner in which this showing can be made depends upon which party will bear the burden of persuasion on the challenged claim at trial. If the moving party will bear the burden of persuasion at trial, that party must support its motion with credible evidence — using any of the materials specified in Rule 56(c) — that would entitle it to a directed verdict if not controverted at trial. Such an affirmative showing shifts the burden of production to the party opposing the motion and requires that party either to produce evidentiary materials that demonstrate the existence of a "genuine issue" for trial or to submit an affidavit requesting additional time for discovery.

If the burden of persuasion at trial would be on the non-moving party, the party moving for summary judgment may satisfy Rule 56's burden of production in either of two ways. First, the moving party may submit affirmative evidence that negates an essential element of the nonmoving party's claim. Second, the moving party may demonstrate to the court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim.

If the moving party has not fully discharged this initial burden of production, its motion for summary judgment must be denied[.]

Celotex, 477 U.S. at 330-32 (Brennan, J., dissenting) (citations and footnotes omitted); see Nissan Fire Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102-03 (9^th Cir. 2000) ("If a moving party fails to carry its initial burden of production, the nonmoving party has no obligation to produce anything[.]"); see also Trainor v. Apollo Metal Specialities, 318 F.3d 976, 979 (10^th Cir. 2002), as amended (same); Hunter v. Caliber Sys., Inc., 220 F.3d 702, 725 (6^th Cir. 2000) (same).

Because McLaughlin will bear the burden of persuasion at trial regarding its standing, damages, and punitive damages, it was required to support its motion for partial summary judgment with evidentiary materials. McLaughlin has not carried its initial burden of production as it pointed to no evidence in the record to establish these matters. Therefore, Newcourt was under no obligation to produce anything in order to defeat McLaughlin's motion, and the motion must be denied as to standing, damages and punitive damages.

As for the statute of limitations defenses, as stated, Newcourt will bear the burden of persuasion on these defenses at trial. Thus, McLaughlin could carry its burden of production either by submitting evidence that negates the defense or by demonstrating that the evidence is insufficient to establish the defenses. It has done neither, and the record, including McLaughlin's Amended Complaint, conclusively demonstrate that some of McLaughlin's claims are barred by the applicable statutes of limitations, as discussed below, see infra at Sections VIII.C.-VIII.E.1.

Accordingly, the Plaintiff's motion for partial summary judgment is DENIED.

IV. MOTION TO STRIKE McCUTCHEON OPINIONS

Newcourt moves the court to strike certain opinions of McLaughlin's expert, Dr. Barbara McCutcheon, which are offered in response to Newcourt's motion for summary judgment. It is contended that Dr. McCutcheon's opinions fail to satisfy the criteria for admissibility of expert opinions in that she relies on insufficient information not of the type of data reasonably relied upon by economists, she applies no methodology to the facts, she fails to identify and test alternate hypotheses, and she ignores contradictory evidence. McLaughlin opposes the motion.

Rule 702 of the Federal Rules of Evidence governs the admissibility of expert witness testimony. Expert testimony is admissible under the rule if it will assist the trier of fact and if "(1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case." Fed.R.Evid. 702; Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 593-95 (1993). The court has reviewed Dr. McCutcheon's affidavits and expert report and finds it unsupported by sufficient facts or data and lacking in a reliable methodology. For the reasons advanced by Newcourt in its brief supporting its motion to strike and its reply brief, the court concludes that Dr. McCutcheon's opinions regarding the relevant product and geographic markets and market power are inadmissible and therefore should be stricken. Only a few of the grounds for striking the opinions are highlighted below.

Dr. McCutcheon's opinions are based on insufficient data such as the Plaintiff's allegations in the complaint, some documents produced in discovery, limited anecdotal deposition testimony in both this action and the Minnesota action, some financial statements and business documents, trade publications, and "relevant publically available statistical sources, and the relevant economic literature." (McCutcheon Rep. 2/5/01 ¶ 3.) The only market data expressly relied on by Dr. McCutcheon in reaching her opinions as indicated in her report was data on purchases of body type 1 school buses delivered between 1979 and 1993 provided by the Minnesota Department of Education. ( Id. ¶ 9 n. 1 ¶ 10 n. 4.) It is not sufficient to assert that market data or marginal cost information is publicly unavailable. It is not sufficient for an expert to selectively apply some (favorable) factors of an approved methodology such as the Horizontal Merger Guidelines. See Elcock v. Kmart Corp., 233 F.3d 734, 748-49 (3d Cir. 2000) (rejecting expert's hodge-podge approach of combining factors from two different methodologies where there was no showing that this approach was generally accepted). It is insufficient for an expert to merely mention cross-elasticity of demand or supply; an analysis is required. And, no evidentiary hearing is necessary for this court to make a determination, based on a fully briefed motion and comprehensive evidentiary record, that an expert's opinion fails to satisfy the rigors for admissibility. See, e.g., Niam v. Ashcroft, 354 F.3d 652, 660 (7^th Cir. 2004) (noting that a Daubert hearing is not always required).

More specifically, in opining that the relevant product market is the market for Carpenter distributorships, the only "data" upon which Dr. McCutcheon relied was McLaughlin's allegations in the complaint in the Minnesota action (McCutcheon Aff. 5/3/01 ¶ 8; McCutcheon Aff. 4/15/99 ¶ 26.a); "deposition testimony to the effect that a distributor might not necessarily want to be a distributor of certain manufacturers of school buses" (McCutcheon Dep. 2/6/01 at 87) (emphasis added); and her opinions that "[s]chool bus buyers have preferences for specific manufacturer's buses and will not accept another bus as a perfect substitute" and that "[s]chool bus dealers are locked into dealing the buses of a particular manufacturer, by exclusive dealing provisions, by investing in specific knowledge and relationships with a single manufacturer, and by investing in buyers[.]" (McCutcheon Aff. 5/3/01 ¶ 8.a., b.) Dr. McCutcheon then adds that bus "dealerships may be bought and sold." ( Id. ¶ 8.b (relying on the sale by Padfield Bus of its Carpenter dealership to Southern Illinois Bus Sales)). This assertion seems to undermine her opinion that school bus dealers are "locked-in" to distributorships. Furthermore, Dr. McCutcheon testified that she conducted no investigation of the market for school bus distributorships (McCutcheon Dep. 4/30/98 at 41-42) and conducted no analysis of any market data to support her opinion that school bus dealers did not change brands or manufacturers. (McCutcheon Dep. 2/6/01 at 135 (stating she's done no formal analysis of whether bus dealers change brands, but has read a lot of deposition testimony); see also id. at 87)).

The court therefore concludes that Dr. McCutcheon's opinion that the relevant product market is the market for Carpenter distributorships is inadequately supported and insufficient to establish the relevant product market.⁴ The opinion is not based on the type of data reasonably relied upon by economists such as a market data analysis or cost analysis. There is no indication that Dr. McCutcheon considered any reasonably interchangeable products, and she testified that she did no statistical analysis of the cross-elasticity of price, demand or supply. (McCutcheon Dep. 4/30/98 at 123.)

4 The same is true regarding her opinion that the relevant product market is the sale of Carpenter buses to end users, though it seems McLaughlin no longer asserts this as a relevant product market. Regardless, this opinion is based on unreliable data or information, no market analysis ( see McCutcheon Dep. 4/30/98 at 64-65, 76; McCutcheon Dep. 2/6/01 at 43 (stating she has no information whether the 158 buyers who purchased from Carpenter also purchased other brands of school buses)) and unsupported by any acceptable methodology or cross-elasticity of demand analysis. (McCutcheon Suppl. Dep. ¶ 12 (asserting that "data to perform cross-elasticity of demand analysis . . . was not available")).

Opinions of this sort consistently have been held inadmissible and insufficient to establish the relevant product and geographic markets and market power. See, e.g., Lantec, Inc. v. Novell, Inc., 306 F.3d 1003, 1025-26 (10^th Cir. 2002) (holding no abuse of discretion to exclude expert's testimony regarding product market where testimony was based on unreliable data and unsupported by cross-elasticity of demand analysis); Metro Indus., Inc. v. Sammi Corp., 82 F.3d 839, 848 (9^th Cir. 1996) (expert opinion regarding relevant product and geographic market and market power held insufficient where not based on reasonably sound data such as a detailed examination of market data, an analysis of cost, comparable usage, or comparative features of other competing products and based only on limited anecdotal evidence); Gateway Contr. Servs., LLC v. Sagamore Health Network, Inc., IP 01-1714-C-M/S, 2002 WL 731686, at *26 (S.D. Ind. Mar. 20, 2002) (excluding expert report which was conclusory, based on data or facts gathered from discussions with plaintiff's employees or its counsel and not based on reliable principles and methods); see also Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430, 436 (3^d Cir. 1997) ("Where the plaintiff fails to define its proposed relevant market with reference to the rule of reasonable interchangeability and cross-elasticity of demand or alleges a proposed relevant market that clearly does not encompass all interchangeable substitute products . . ., the relevant market is legally insufficient and a motion to dismiss may be granted."). The Supreme Court has taught that a relevant market is comprised of the products that are "reasonably interchangeable by consumers for the same purposes." United States v. E.I. du Pont de Nemours Co., 351 U.S. 377, 395 (1956). Dr. McCutcheon's opinion does not comport with this teaching.

McLaughlin also offers Dr. McCutcheon's opinion that the relevant geographic market is McLaughlin's Carpenter sales territory as defined by its distributorship agreements with Carpenter. (McCutcheon Rep. 2/5/01 ¶ 5.) The basis for this opinion is McLauglin's exclusive distributorship with Carpenter (McCutcheon Aff. 5/3/01 ¶ 9) and the assumption that the relevant product market was Carpenter buses, which, as stated, is not sufficiently reliable, see supra at 10 n. 2. This alone renders Dr. McCutcheon's opinion regarding relevant geographic market inadmissible. Furthermore, McLaughlin has not shown that an exclusive distributorship agreement is the type of data or other information reasonably relied upon by economists in forming opinions or inferences about relevant geographic markets, and it is its burden to do so to establish the admissibility of Dr. McCutcheon's opinion. See, e.g., Porter v. Whitehall Labs., Inc., 791 F. Supp. 1335, 1343 (S.D. Ind. 1992) (quoting Fed.R.Evid. 703), aff'd, 9 F.3d 607 (7^th Cir. 1993).

In addition, "'the geographic market is not comprised of the region in which the seller attempts to sell its product, but rather is comprised of the area where his customers would look to buy such a product.'" Lantec, 306 F.3d at 1027 (quoting Tunis Bros. Co. v. Ford Motor Co., 952 F.2d 715, 726 (3^rd Cir. 1991)); see also Surgical Care Ctr. of Hammond, L.C. v. Hosp. Serv. Dist. No. 1 of Tangipahoa Parish, 309 F.3d 836, 840 (5^th Cir. 2002) (concluding plaintiff failed to meet its burden of offering sufficient evidence to define the relevant geographic market where its expert relied solely on the definition of the defendant's service area and failed to identify competitors); Morgan, Strand, Wheeler Biggs v. Radiology, Ltd., 924 F.2d 1484, 1490 (9^th Cir. 1991) (concluding that where the plaintiff company competes does not define the relevant geographic market); Bailey v. Allgas, Inc., 148 F. Supp. 2d 1222, 1236-37 (N.D. Ala. 2000) (rejecting expert determination of relevant geographic market where expert defined the market based only on the plaintiff's service area and did not consider competitors' location, pricing, or transportation costs), aff'd, 284 F.3d 1237 (11^th Cir. 2002). Thus, the relevant geographic market is not defined by the area in which a plaintiff attempts to sell its product under an exclusive distributorship agreement. McLaughlin offers no evidence that school bus customers within its exclusive territory could not turn to school bus distributors outside its territory in buying school buses, specifically non-Carpenter buses. The court concludes that Dr. McCutcheon's opinion that the relevant geographic market is defined by the Carpenter distributorship agreements lacks factual support and, therefore, is inadmissible and fails to create a genuine issue of fact.

Dr. McCutcheon's opinion also is offered to establish that Carpenter had market power in the school bus sales market. She defines "market power" as the ability to "price above marginal cost." (McCutcheon Dep. 2/6/01 at 87.) Under Supreme Court and Seventh Circuit case law, however, this is not how "market power" is defined. See Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 109 n. 38 (1984) (defining "market power" for Sherman Act purposes as "the ability to raise prices above those that would be charged in a competitive market") (citations omitted); 42nd Parallel North v. E Street Denim Co., 286 F.3d 401, 405 (7^th Cir. 2002) (defining "market power" in the antitrust context as the ability to "raise prices above a competitive level without losing . . . business.") (citing Valley Liquors, Inc. v. Renfield Imps., Ltd., 822 F.2d 656, 666-68 (7^th Cir. 1987)).

McLaughlin does not offer evidence that Newcourt or Carpenter had the ability to raise their prices above those which would be charged in a competitive market, either through Dr. McCutcheon or another evidentiary submission. When asked whether she had any evidence that Carpenter was earning super competitive prices for school buses, Dr. McCutcheon did not offer any such evidence. ( See McCutcheon Dep. 2/6/01 at 324.)

Even if Dr. McCutcheon's definition of "market power" were appropriate, her opinion that Carpenter had market power lacks a factual basis. This opinion is based on limited anecdotal deposition testimony that some buyers were willing to pay more for a Carpenter bus than for another manufacturer's bus, documents revealing that Minnesota Body won a contract although it did not submit the lowest bid, a "few bid contracts" she reviewed, and her opinion that Carpenter buses were differentiated. ( E.g., McCutcheon Aff. 5/3/01 ¶ 7.e, h; McCutcheon Rep. 2/5/01 ¶ 16; McCutcheon Dep. 2/6/01 at 22-23, 91, 324.) There has been no showing that this is the type of data or information reasonably relied upon by economists in forming opinions or inferences about market power, and it is McLaughlin's burden to make such a showing to establish the admissibility of its expert's opinion. See, e.g., Porter, 791 F. Supp. at 1343. Moreover, Dr. McCutcheon testified that she had no evidence of Carpenter's marginal cost. (McCutcheon Dep. 2/6/01 at 138-39, 324; see also McCutcheon Suppl. Aff. ¶ 6 (assuming that Carpenter's prices exceed its marginal costs).) It is difficult to discern how Dr. McCutcheon can opine that Carpenter was able to charge prices above its marginal costs when she admits she had no evidence of its marginal costs. Lastly, product differentiation is not a substitute for market power and does not necessarily result in market power in any event. See Elliott v. United Center, 126 F.3d 1003, 1005 (7^th Cir. 1997) (reiterating circuit's view that a company could have monopoly power in its own product "absent proof that the product itself has no economic substitutes"); Will v. Comprehensive Accounting Corp., 776 F.2d 665, 673 n. 4 (7^th Cir. 1985) (explaining that the product differentiation is not a substitute for proof of market power). For all these reasons, the court concludes that Dr. McCutcheon's opinion that Carpenter had market power in the school bus market is inadmissible and therefore fails to create a genuine issue.

Newcourt's motion to strike the McCutcheon opinions is well-taken. For the reasons advanced by Newcourt in its motion, supporting and reply briefs, the court finds that the opinions are inadmissible. The motion therefore is GRANTED.

V. DEFENDANTS' MOTION TO STRIKE

Newcourt has moved to strike the following: (1) factual assertions in the Plaintiff's brief in response to Newcourt's motion for summary judgment that are unsubstantiated by citation to record evidence; (2) factual assertions in McLaughlin's response brief and its L.R. 56.1 statements for which McLaughlin has not provided a specific record citation; (3) inadmissible hearsay; (4) inadmissible lay opinion testimony; and (5) an unauthenticated document offered in opposition to Newcourt's summary judgment motion as well as factual assertions based on said document. McLaughlin opposes the motion.

McLaughlin first responds that Local Rule 56.1 does not apply to arguments in briefs and that factual arguments belong in a brief rather than a Rule 56.1 Statement. McLaughlin is correct. However, any factual assertion by the parties which is unsubstantiated by specific citation to record evidence will be disregarded. If a specific citation is provided in a Rule 56.1 Statement, though not in a brief, that would be sufficient substantiation for summary judgment purposes. And, of course, the court is capable of recognizing unsubstantiated factual assertions whether they appear in a Rule 56.1 Statement or in a brief. The court also is capable of recognizing and distinguishing statements containing argument, conclusions and inferences from pure assertions of fact, and will do so accordingly.

McLaughlin next argues that the court should not strike factual statements substantiated by specific citations to "non-voluminous documents that speak as a whole not capable of specific citation" (Mem. Resp. Defs.' Mot. Strike at 4), or statements for which a specific citation is provided in the brief or elsewhere. The Plaintiff relies on one of the purposes of Local Rule 56.1 — to provide the parties with notice of the factual support for their respective arguments at summary judgment. See Mirocha v. TRW, Inc., 805 F. Supp. 663, 675 (S.D. Ind. 1992). McLaughlin compares itself to the plaintiffs in Mirocha who the court concluded appeared to have attempted to comply with the rule by providing citations to depositions and other evidentiary materials. Id. There is no indication in Mirocha that the citations were nonspecific, that is, that the citations were to depositions or other materials in their entirety and without a specific page citation as is the case with so many of the citations submitted by McLaughlin.

Notifying the parties of the factual support for summary judgment arguments is not the only purpose of Local Rule 56.1. The rule is "of significantly greater benefit to the court, which does not have the advantage of the parties' familiarity with the record and often cannot afford to spend the time combing the record to locate the relevant information." Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 923-24 (7^th Cir. 1994). Where a party fails to provide citation to specific evidence in the record to support that party's factual assertions, "the court should not have to proceed further, regardless of how readily it might be able to distill the relevant information from the record on its own." Id. at 923 (emphasis added); see also Schuster v. Lucent Techs., Inc., 327 F.3d 569, 579 (7^th Cir. 2003) (stating that under Rule 56 the party opposing summary judgment must point to specific facts to raise a genuine issue for trial); Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 898 (7^th Cir.) ("We have repeatedly assured the district courts that they are not required to scour every inch of the record for evidence that is potentially relevant to the summary judgment motion before them."), cert. denied, 124 S. Ct. 535 (2003).

The court agrees with McLaughlin that factual statements supported by specific citation to record evidence should not be stricken simply because they are also supported by nonspecific evidentiary citations. However, the court disagrees that factual assertions supported by nonspecific citations to "non-voluminous documents that speak as a whole" or assertions for which a specific citation is provided in a brief or elsewhere are a sufficient attempt at compliance with Local Rule 56.1. Other than the 18-page Operating Agreement between Carpenter and Newcourt, the 12-page 1991 and 1994 Distributorship Agreements between Carpenter and McLaughlin, and the approximately 47 pages of Timothy Durham's employment records (Mem. Resp. Defs.' Mot. Strike at 5), McLaughlin has not identified any other documents it considers to fit the "non-voluminous documents that speak as a whole" characterization. The court considers these documents sufficiently voluminous such that a specific citation to a page or paragraph number is required. See, e.g., Waldridge, 24 F.3d at 923 (rejecting plaintiff's argument that her failure to comply with Rule 56.1 was immaterial since the evidence which created a disputed facts could be found in her expert's affidavit submitted with her memorandum where affidavit was 15-pages in length). In addition, McLaughlin has not identified the particular assertions which, though not supported by specific citation to record evidence in a Rule 56.1 statement, it claims are supported by specific citation in a brief or elsewhere. The court is not required to hunt for the specific citations provided in a brief or elsewhere in order to find substantiation for factual assertions. See, e.g., United States v. Dunkel, 927 F.2d 955, 956 (7^th Cir. 1991) ("[j]udges are not like pigs, hunting for truffles buried in briefs") (per curiam).

The Defendants also object to Exhibit 404 to the Tillery deposition and the Tillery testimony about the exhibit on hearsay grounds. This objection is well-taken. Exhibit 404 is purportedly minutes of a May 16-17 meeting of the Carpenter Distributor Council, containing alleged statements of Tim Durham. McLaughlin maintains that the minutes fall under the hearsay exception for records of regularly conducted business activity. Fed.R.Evid. 803(6). Hi Tillery testified that his company received this document in the ordinary course of its business as a Carpenter distributor. (Tillery Dep. at 34.) This does not satisfy the foundational requirements of Federal Rule of Evidence 803(6). See, e.g., Collins v. Kilbort, 143 F.3d 331, 338 (7^th Cir. 1998) (stating that Rule 803(6) requires "that the witness have knowledge of the procedure under which the records were created" and concluding that district court abused its discretion in admitting employee's testimony about his medical bills where he had no knowledge about the hospital's billing practices). McLaughlin argues that the Defendants waived any objection to the exhibit by failing to raise it at Mr. Tillery's deposition. "[O]bjections as to foundation are not waived unless they could have been obviated or removed if raised at the deposition." Daubach v. Wnek, No. 00 C 0459, 2001 WL 290181, at *2 (N.D. Ill. Mar. 16, 2001); see also Rosary-Take One Prod. Co. Ltd. v. New Line Distrib., Inc., 89 Civ. 1905(CSH), 1996 WL 79328, at *2 (S.D.N.Y. Feb. 23, 1996). McLaughlin offers nothing to suggest that the lack of foundation for Mr. Tillery's testimony regarding the purported minutes could have been obviated had Newcourt raised the objection at the deposition. Therefore, the court finds that the objection was not waived.

McLaughlin submits that Exhibit 404 is admissible as an admission of a party-opponent under Rule 801(d)(2)(A). In order to establish that Mr. Durham made the alleged statement regarding requiring dealers to use the Newcourt floor plan, however, McLaughlin offers the purported minutes, which are hearsay and McLaughlin has not shown that the minutes fall within an exception to the hearsay rule. Therefore, the court finds that the motion to strike Exhibit 404 to the Hi Tillery deposition and Mr. Tillery's testimony about the exhibit should be and is GRANTED.

Accordingly, the Defendant's motion to strike is GRANTED IN PART AND DENIED IN PART as explained herein.⁵

5 The court does not address the Tillery testimony that Tillery Chevrolet was terminated as a Carpenter dealer because it did not sign up for the Newcourt floor plan, the Shetky testimony that only three Carpenter dealers had not signed up for the floor plan, or the attachment (a computer printout) to Timothy McLaughlin's affidavit, as it is unnecessary to do so in that the assertions supported by these submissions are not material to resolution of the summary judgment motion. The objections to the Hageness testimony regarding price increases following McLaughlin's exit from the school bus business are addressed infra, see Section VIII.A. at pages 58-59.

VI. MOTION TO STRIKE DEFENDANTS' OBJECTIONS IN REPLY TO PLAINTIFF'S STATEMENT OF ADDITIONAL MATERIAL FACTS

The Plaintiff moves to strike Newcourt's objections to McLaughlin's Statement of Additional Material Facts as improper argument under Local Rule 56.1(f). McLaughlin argues that Newcourt's objections to statements of fact on the basis that the evidence does not support the assertions are improper because the objections do not reference what the facts really are, or are made with argumentative discussions about the evidence. McLaughlin cites Pike v. Caldera, 188 F.R.D. 519 (S.D. Ind. 1999), for support, but Pike involved a different version of L.R. 56.1 than that which controls the pending summary judgment motions in this case. In contrast with the older version of the rule, the version of L.R. 56.1(f) which applies to the pending dispositive motions in this case expressly allows for objections to factual assertions and evidence cited in support, and allows for such objections to be placed in a party's reply to a factual assertion. The pertinent provision states: "Objections to material facts and/or cited evidence shall (to the extent practicable) set forth the grounds for the objection. . . ." L.R. 56.1(f)(3). Thus, the language in Pike stating that L.R. 56.1 submissions should not contain argument is inapplicable.

Newcourt's assertions of objections on the basis that the evidence cited does not support the statement are brief or relatively brief, see, e.g., Defendant's Reply to Plaintiff's Statement of Additional Material Facts Nos. 52(a), 56 and 66, and appear, to the extent practicable, to set forth the grounds for the objection in a concise and single sentence. Given the objection — that the cited evidence does not support the fact asserted — reference to other evidence is unnecessary.

McLaughlin also contends that Newcourt's objections on the basis that "[t]he statement is not material" are improper as they lack further explanation or citation to authorities or evidence and constitute argument. Again, as stated, the version of L.R. 56.1(f) which applies here expressly allows for objections and the grounds therefore to be made in a Rule 56.1(f) submission. Furthermore, where an asserted fact is immaterial, that is, not potentially outcome determinative, see L.R. 56.1(h); Pike, 188 F.R.D. at 527; it could be said that no objection or further explanation is necessary. The court is capable of sorting through the immaterial assertions to arrive at the material ones, though it prefers not to have to do so.

McLaughlin complains that Newcourt did not explain why the factual assertions to which it objected were immaterial. An analysis of why a factual assertion is immaterial could require a thorough discussion of the facts and applicable law, which would be inappropriate in a L.R. 56.1(f) submission. See L.R. 56.1(f)(2); Pike, 188 F.R.D. at 525, 528. Newcourt's materiality objections are, for the most part, briefly stated and without extensive argument, see, e.g., Defendant's Reply to Plaintiff's Statement of Additional Material Facts Nos. 48-50, 52(b)-55. The court, therefore, does not find Newcourt's objections based on immateriality improper under L.R. 56.1(f).

Accordingly, the Plaintiff's Motion to Strike Defendants' Objections in Reply to Plaintiff's Statement of Additional Material Facts is DENIED.

VII. DEFENDANTS' OBJECTION TO PLAINTIFF'S SURREPLY TO MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S STATEMENT OF ADDITIONAL MATERIAL FACTS AND EVIDENCE ON SURREPLY

The Defendants object to McLaughlin's filing of a surreply to the summary judgment motion and a statement of additional material facts and evidence on surreply. They argue that the surreply does not comply with Local Rule 56.1(d)(2) and the latter is unauthorized by the Local Rules.

The surreply technically is in noncompliance with Local Rule 56.1(d)(2) in that it responds not only to the Defendants' new evidence offered on reply but also addresses most issues raised by the summary judgment motion. However, because the Defendants have not articulated any prejudice were the court to consider all the arguments in the surreply, the court declines to strike the surreply for noncompliance with the Local Rule.

The Statement of Additional Material Facts and Evidence on Surreply is another matter, however. In large part, it is McLaughlin's belated attempt to substantiate factual assertions within its Statement of Additional Material Facts for which it provided nonspecific citations to entire evidentiary submissions. (As noted, Newcourt moved to strike such assertions for inadequate substantiation under Local Rule 56.1(f)(2) and the motion is granted in part.) This is a belated and improper attempt to do something which McLaughlin could have done in a timely and appropriate fashion — substantiate its factual assertions opposing entry of summary judgment. The court is not inclined to give McLaughlin a second bite at the apple when it has offered no reason for failing to specifically substantiate it assertions in the first go around. In addition, the factual assertions contained in the Additional Statements of Material Fact on Surreply are an attempt by the Plaintiff to shore up evidence for its RICO claims. The time to do so was in its response brief, and McLaughlin has not offered anything to justify its failure to have done so at that time. And, the assertions in the surreply are not responsive to any additional evidence or objections provided by the Defendants on reply. Therefore, the court SUSTAINS the Defendants' objection to the Plaintiff's additional citations to evidentiary materials in support of its Statement of Additional Material Facts which citations are contained within the Plaintiff's Statement of Additional Material Facts and Evidence on Surreply, and the same will not be considered by the court in deciding the pending motions.

VIII. NEWCOURT'S MOTION FOR SUMMARY JUDGMENT

Newcourt contends that it is entitled to summary judgment on all counts of the Amended Complaint. The court first addresses the antitrust claims.

A. COUNT I: ANTITRUST

Count I of the Amended Complaint asserts the following antitrust claims against Newcourt: a claim of resale price maintenance, a claim based on McLaughlin's loss of the "prime" Minnesota territory, a claim of price discrimination under the Robinson-Patman Act, a tying claim under Section 1 of the Sherman Act, and a claim based on the "constructive termination" of McLaughlin as a Carpenter dealer. McLaughlin claims that Newcourt violated "applicable antitrust laws, including but not limited to 15 U.S.C. § 1, 15 U.S.C. §§ 13a et seq. and Minnesota Statute § 325D.51; § 325D.53, subd. 1(3); and § 325D.03.04[.]" (Am. Compl. ¶ 47.) Newcourt seeks summary judgment on all these claims.

McLaughlin states in its response brief that it abandons its price discrimination claims under Section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a) and under the Minnesota Act Against Unfair Discrimination, Minnesota Statute § 325D.03-04. (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 9-10.) Therefore, summary judgment will be GRANTED Newcourt on these claims without further discussion.

According to Newcourt, the federal and Minnesota state antitrust claims which accrued before November 22, 1994, are barred by the four-year statute of limitations. See 15 U.S.C. § 15b; Minn. Stat. § 325D.64.⁶ McLaughlin responds that it has not claimed that Newcourt is liable for the June 1991 resale price maintenance or Carpenter's 1992 termination of McLaughlin from the prime Minnesota markets, and that it stipulates that it does not and has never alleged that Newcourt is liable for such claims. (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 6.) However, paragraphs 40 and 42(g) of the Amended Complaint do allege the resale price maintenance claim and 1992 termination claim against Newcourt and McLaughlin has not filed a formal stipulation with the court. Since McLaughlin is willing to stipulate that it does not allege such claims, summary judgment will be GRANTED Newcourt on the claims.

6 The statute of limitations was tolled while the motion to amend the complaint was pending from November 16, 1998, until September 9, 1999. See Moore v. State of Ind., 999 F.2d 1125, 1131 (7^th Cir. 1993) (stating that the submission of a motion for leave to amend a complaint tolls the statute of limitations).

This leaves the tying claim and constructive termination of McLaughlin's distributorship. McLaughlin asserts that to the extent Newcourt seeks summary judgment on other antitrust claims, it has failed to sufficiently identify them. According to McLaughlin, among these are the group boycott or concerted refusal to deal claims under Section 1 of the Sherman Act and Minnesota Statute § 325D.53, subd. 1(3) and a commercial bribery claim under Section 1 of the Sherman Act and Section 2(c) of the Robinson-Patman Act. (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 6-7.) This claims are addressed below.⁷

7 To the extent that McLaughlin asserts claims under any other provision of federal or state antitrust law, such claims are considered waived as McLaughlin has not specifically identified any other provisions.

Under Section 1 of the Sherman Act, 15 U.S.C. § 1, "[e]very contract, combination . . . or conspiracy, in restraint of trade" is illegal. "Although the Sherman Act, by its terms, prohibits every agreement 'in restraint of trade,' [the Supreme] Court has long recognized that Congress intended to outlaw only unreasonable restraints." State Oil Co. v. Khan, 522 U.S. 3, 7 (1997). Thus, a plaintiff asserting a claim under Section 1 of the Sherman Act must prove: "(1) a contract, combination or conspiracy; (2) a resultant unreasonable restraint of trade in the relevant market; and (3) an accompanying injury." Denny's Marina, Inc. v. Renfro Prods., Inc., 8 F.3d 1217, 1220 (7^th Cir. 1993).

The Plaintiff asserts a claim of a tying arrangement under Section 1 of the Sherman Act. A tying arrangement involves "an agreement to sell one product (the tying product) only on the condition that the purchaser buy a second product (the tied product). See A.O. Smith Corp. v. Lewis, Overbeck Furman, 979 F.2d 546, 547 (7^th Cir. 1992) ( N. Pac. Ry. Co. v. United States, 356 U.S. 1, 5-6 (1958)).

Not every tying arrangement is illegal under the Sherman Act. "'[T]he essential characteristic of an invalid tying arrangement lies in the seller's exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms.'" Midwest Gas Servs., Inc. v. Ind. Gas. Co., 317 F.3d 703, 712 (7^th Cir.) (quoting Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12 (1984)), cert. denied, 124 S. Ct. 82 (2003). In the Seventh Circuit, "a tying agreement is not actionable unless the defendant has substantial market power in the tying product." Hardy v. City Optical Inc., 39 F.3d 765, 767 (7^th Cir. 1994) (citing Will v. Comprehensive Accounting Corp., 776 F.2d 665, 670-74 (7^th Cir. 1985)); see also Menasha Corp. v. News Am. Mktg In-Store, Inc., 354 F.3d 661, 663 (7^th Cir. 2004) ("The first requirement in every suit based on the Rule of Reason is market power, without which the practice cannot cause those injuries . . . that matter under the federal antitrust laws.").

"A company has market power if it can raise prices above a competitive level without losing its business." 42nd Parallel North v. E Street Denim, 286 F.3d 401, 405 (7^th Cir. 2002) (citing Valley Liquors, Inc. v. Renfield Imps., Ltd., 822 F.2d 656, 666-68 (7^th Cir. 1987)). There are two ways to prove market power. Toys "R" Us, Inc. v. FTC, 221 F.3d 928, 937 (7^th Cir. 2000). The first way is with direct evidence of anticompetitive effects (reduction in output or increase in price) in the relevant market. Id. (citing FTC v. Ind. Fed'n of Dentists, 476 U.S. 447, 460-61 (1986)); Generac Corp. v. Caterpillar, Inc., 172 F.3d 971, 978 (7^th Cir. 1999). In determining whether the challenged restraint has an anticompetitive effect in the relevant market, the court looks to "the challenged restraint's effects on both intrabrand and interbrand competition." 42nd Parallel North, 286 F.3d at 404-05 (citing Valley Liquors, Inc. v. Renfield Imps., Ltd., 678 F.2d 742, 745 (7^th Cir. 1982)). The second way to prove market power is with evidence of the relevant product and geographic markets and evidence "that the defendant's share exceeds whatever threshold is important for the practice in the case," id., also known as market power. Newcourt contends that McLaughlin cannot prevail on its tying arrangement claim because it cannot prove: (1) the relevant product market for the tying product; (2) the relevant geographic market for the tying product; (3) that Newcourt or Carpenter had market power in the tying product; (4) a substantial danger that Carpenter or Newcourt would acquire market power in the tied product market; and (5) that it incurred antitrust injury.

McLaughlin's claim that Newcourt has ignored its per se tying arrangement claim is rejected. Newcourt seeks summary judgment on the tying arrangement claim under both per se and rule of reason theories. The Seventh Circuit does not distinguish between a per se tying claim and rule of reason tying claim. See Hardy, 39 F.3d at 767. The Hardy court recognized that other jurisdictions required a showing of market power only where the plaintiff proceeds under a per se theory, but rejected that approach as inconsistent with Will and the Seventh Circuit's rule "that substantial market power is a threshold requirement of all rule of reason (as well as some per se) cases." Id. at 767 (citing Chicago Prof'l Sports Ltd. P'ship v. Nat'l Basketball Ass'n, 961 F.2d 667, 673 (7^th Cir. 1992); Morrison v. Murray Biscuit Co., 797 F.2d 1430, 1435 (7^th Cir. 1986)).

Therefore, to show market power, McLaughlin first must establish the relevant product market. A relevant product market consists of the products that have reasonable interchangeability by consumers for the same purposes. United States v. E.I. duPont de Nemours Co., 351 U.S. 377, 404 (1956); PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101, 105 (2^nd Cir. 2002); Telecor Communications, Inc. v. Southwestern Bell Tel. Co., 305 F.3d 1124, 1130-31 (10^th Cir. 2002) ("The basic relevant product market test is 'reasonable interchangeability' [which] may be measured by, and is substantially synonymous with, cross-elasticity.") (citing Brown Shoe Co. v. United States, 370 U.S. 294, 325 (1962)), cert. denied, 123 S. Ct. 2073 (2003); Apani Southwest, Inc. v. Coca-Cola Enterp., 300 F.3d 620, 626 (5^th Cir. 2002) ("In ascertaining the relevant product market, courts consider the extent to which the seller's product is 'interchangeable in use' and the degree of 'cross-elasticity of demand between the product itself and substitutes for it.'"); 3M v. Pribyl, 259 F.3d 587, 603 (7^th Cir. 2001).⁸ "Products will be considered to be reasonably interchangeable if consumers treat them as 'acceptable substitutes.'" PepsiCo, 315 F.3d at 105 (quoting FTC v. Cardinal Health, Inc., 12 F. Supp. 2d 34, 46 (D.D.C. 1998) ("[T]he relevant market consists of all of the products that the Defendants' customers view as substitutes to those supplied by the Defendants."); see also 3M, 259 F.3d at 603.

8 "A market is cross-elastic if rising prices for product A cause consumers to switch to product B." Telecor, 305 F.3d at 1131.

In its moving papers, Newcourt argued that McLaughlin's position was that the relevant tying product markets were (1) the sale of Carpenter buses by Carpenter to Carpenter dealers and (2) the sale of school buses to end-users. In response to the summary judgment motion, McLaughlin asserts that the tying product was "the Carpenter distributorship rights." (Pl.'s Mem. Resp. at 12; see also id. at 14 ("the tying product was the bundle of rights and goods that were a Carpenter distributorship").)⁹ Thus, whether the sale of school buses to end users is a relevant product market is no longer in issue.¹⁰

9 McLaughlin's request to strike any argument in Newcourt's reply brief regarding the distributorship market (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 14 n. 17) is denied. Though Dr. McCutcheon stated in an affidavit filed in the Minnesota action that the relevant markets included the market for distributorships of large school buses and for Carpenter buses (McCutcheon Aff. 4/15/99 (Goldsmith Aff., Ex. 75)), that the relevant product market is a Carpenter distributorship cannot be fairly gleaned from her expert report submitted in this action. ( See McCutcheon Rep. ¶¶ 6-9, 12 (stating that the relevant market was "the market for school buses").) In discussing tying, Dr. McCutcheon describes the tie-in between "the sale of buses to a dealer" and the tie-in of "bus sales." ( Id. at 7.) She nowhere states in her report that the tie-in/tying product is Carpenter distributorships.

10 Even if it were, McLaughlin's expert evidence that this constitutes the relevant product market is inadmissible and insufficient to create a genuine issue of fact.

The Defendants reply that Carpenter distributorship rights are not a relevant product market. This argument has appeal. Though the court has found no Seventh Circuit decision directly addressed the issue, it seems unlikely that the Circuit would conclude that a distributorship or distributorship rights could constitute a tying product. See Will v. Comprehensive Accounting Corp., 776 F.2d 665, 670 n. 1 (7^th Cir. 1985) (noting that "franchises" are just names, not products and that "[a] tie involves products that may be sold in separate markets. But a method of doing business (the franchise) is not sold separately from the ingredients that go into the method of business.").¹¹

11 McLaughlin submits that a distributorship may be a tying product. (Pl.'s Mem. Resp. at 14). The cases cited for support, however, involve situations in which the plaintiff had paid a franchise fee for the franchise. See, e.g., Photovest Corp. v. Fotomat Corp., 606 F.2d 704, 722 (7^th Cir. 1979) (stating that a "franchise license" can be a tying product; plaintiff had paid for each franchise); Little Caesar Enterp., Inc. v. Smith, 34 F. Supp. 2d 459, 502 (E.D. Mich. 1998) (stating that a franchise and its continued operation can be a tying product; plaintiff had paid an initial franchise fee). McLaughlin also argues that a manufacturer's product may constitute the relevant product market under appropriate circumstances. (Pl.'s Mem. Resp. at 17.) The other cases it cites for support also are distinguishable. In Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (1992), the Supreme Court concluded that the tying product market was Kodak parts because the parts for Kodak equipment were unique and not interchangeable. Id. at 456-57, 463-64. Similarly, in Virtual Maintenance, Inc. v. Prime Computer, Inc., 11 F.3d 660 (6^th Cir. 1993), the defendant's product was unique and not interchangeable with any other product. It has not been shown that Carpenter brand buses are unique and not interchangeable with other bus brands. In the other cases cited by McLaughlin, the relevant product market was not defined as a manufacturer's product. ( See Pl.'s Mem. Resp. at 17.)

Other circuit courts have concluded that a single product or brand market does not constitute a relevant product market. See Queen City Pizza, Inc. v. Domino's Pizza, Inc., 124 F.3d 430, 438, 443 (3^d Cir. 1997) (stating that "no court has defined a relevant product market with reference to the particular contractual restraints of the plaintiff" and concluding that Domino's "control over plaintiffs' 'continued enjoyment of rights and services under their Standard Franchise Agreement' is not a 'market.'"); Town Sound Custom Tops, Inc. v. Chrysler Motors Corp., 959 F.2d 468, 480 (3^d Cir. 1992) ("Except in rare circumstances, courts reject market definitions consisting of one supplier's products where other brands compete."); Grappone, Inc. v. Subaru of New England, Inc., 858 F.2d 792, 797 (1^st Cir. 1988) (concluding relevant market is not Subaru vehicles but all vehicles with which Subaru competes); Domed Stadium Hotel, Inc. v. Holiday Inns, Inc., 732 F.2d 480, 488 (5^th Cir. 1984) (stating that a single-product market "is without merit as a matter of law, because absent exceptional market conditions, one brand in a market of competing brands cannot constitute a relevant product market"). This conclusion is sound because defining the relevant product market as a single product or brand ignores the issues of reasonable interchangeability of the defendant's products with its substitutes and the cross-elasticity of demand between the product and its substitutes, which are critical to a determination of the relevant product market. See, e.g., Brown Shoe, 370 U.S. at 325 ("[t]he outer boundaries of a product market are determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it"); E.I. du Pont de Nemours, 351 U.S. at 404; Queen City Pizza, 124 F.3d at 434 (stating that where a plaintiff fails to define a relevant market "with reference to the rule of reasonable interchangeability and cross-elasticity of demand, or alleges a proposed relevant market that clearly does not encompass all interchangeable substitute products . . . the relevant market is legally insufficient"); Nelson v. Monroe Reg'l Med. Ctr., 925 F.2d 1555, 1574 (7^th Cir. 1991) (Cudahy, J., concurring) (the relevant market is "composed of products that have reasonable interchangeability for the purposes for which they are produced").

But even assuming that the Carpenter distributorship could be a relevant product market, the Plaintiff has submitted insufficient evidence to support its claimed product market. As support for its claimed product market in the Carpenter distributorship, McLaughlin relies on its expert, Dr. McCutcheon. The court has concluded that Dr. McCutcheon's opinion regarding the relevant product market is inadmissible, see supra, Section IV. Her opinion therefore is insufficient to establish or raise a genuine issue as to the relevant product market.

Furthermore, the court notes that in defining a relevant product market the question is not whether one product is a perfect substitute for another, as Dr. McCutcheon seems to imply, but rather, whether two products are "reasonably interchangeable." See du Pont de Nemours, 351 U.S. at 404 (stating that the market for monopoly purposes "is composed of products that have reasonable interchangeability for the purposes for which they are produced — price, use and qualities considered."); Eastman Kodak, 504 U.S. at 482 (defining relevant product market for tying claim); Virginia Vermiculite, Ltd v. W.R. Grace Co.-Conn., 98 F. Supp. 2d 729, 737 (W.D. Va. 2000) (plaintiff's expert erred in focusing on perfect substitutes); 3M v. Pribyl, 259 F.3d 587, 603 (7^th Cir. 2001) (noting that resin sheeting is not a perfect substitute for carrier tape, but "if the cost of purchasing Accu-Tech's product and transforming it into carrier tape is comparable to the cost of purchasing 3M's finished product, then an argument that the products are reasonably interchangeable may be viable"). Products are reasonably interchangeable if they are treated as "acceptable substitutes." PepsiCo, Inc., 315 F.3d at 105 (quotation omitted). And, reasonable interchangeability allows for some preference for one product over another. See, e.g., Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 513 (3^rd Cir. 1998) ("Interchangeability implies that one product is roughly equivalent to another for the use to which it is put; while there might be some degree of preference for the one over the other, either would work effectively.") (quotation omitted); Queen City Pizza, 124 F.3d at 437 (same). Thus, a mere preference for a specific manufacturer's brand bus is not sufficient for purposes of establishing a relevant product market.

In addressing McLaughlin's position that school bus dealers are locked into dealing with a particular manufacturer by their exclusive distributorship agreements, the case of Queen City Pizza offers this court guidance. There, the plaintiffs, eleven Domino's franchisees and a related corporation brought antitrust claims against Domino's. The plaintiffs asserted that the relevant product market was the ingredients, supplies, materials, and distribution services used by and in the operation of Domino's pizza stores." Queen City Pizza, 124 F.3d at 437. The court rejected the plaintiff's proposed relevant market, reasoning that the ingredients and supplies that were approved by Domino's were interchangeable with the ingredients and supplies used by other pizza companies, with the only difference being that Domino's franchisees could use only Domino's-approved ingredients and supplies under the terms of their franchise agreements. The plaintiffs argued that this difference created a relevant market in the approved products. The court disagreed:

The test for a relevant market is not commodities reasonably interchangeable by a particular plaintiff, but "commodities reasonably interchangeable by consumers for the same purposes." United States v. E.I. du Pont de Nemours Co., 351 U.S. 377, 395 (1956); Tunis Bros., 952 F.2d at 722. A court making a relevant market determination looks not to the contractual restraints assumed by a particular plaintiff when determining whether a product is interchangeable, but to the uses to which the product is put by consumers in general. Thus, the relevant inquiry here is not whether a Domino's franchisee may reasonably use both approved or non-approved products interchangeably . . ., but whether pizza makers in general might use such products interchangeably.

Queen City Pizza, 124 F.3d at 438. The court added in its discussion of the plaintiffs' tying claim that "where the defendant's 'power' to 'force' plaintiffs to purchase the alleged tying product stems not from the market, but from plaintiffs' contractual agreement to purchase the tying product, no claim will lie." Id. at 443. The Third Circuit reasoned that if contractual restraints made otherwise interchangeable products non-interchangeable, then "any exclusive dealing arrangement, output or requirement contract, or franchise tying agreement would support a claim for violation of antitrust laws," a result which it found untenable. Queen City Pizza, 124 F.3d at 443. The court concluded by noting that "no court has defined a relevant product market with reference to the particular contractual restraints of the plaintiff." Id.

Though the Seventh Circuit has not spoken on the issue, several other circuits likewise have declined to equate contract power with market power when defining a relevant product market. See Maris Distrib. Co. v. Anheuser-Busch, Inc., 302 F.3d 1207, 1219-22 (11^th Cir. 2002) (rejecting argument that the mere existence of a defendant's contract power demonstrates market power: the "court must attempt to ascertain a defendant's economic position in the relevant market, rather than its power pursuant to a particular contract, when considering whether a defendant has market power"), cert. denied, 537 U.S. 1190 (2003); Hack v. President Fellows of Yale College, 237 F.3d 81, 85 (2^d Cir. 2000) (addressing monopolization claim under Sherman Act and stating that "[e]conomic power derived from contractual arrangements affecting a distinct class of consumers cannot serve as a basis for a monopolization claim"); Double D Spotting Serv., Inc. v. Supervalu, Inc., 136 F.3d 554, 560-61 (8^th Cir. 1998) (holding that market defined by one contract was not a relevant market for antitrust purposes); United Farmers Agents Assoc., Inc. v. Farmers Ins. Exch., 89 F.3d 233, 236 (5^th Cir. 1996) (stating that "[e]conomic power derived from contractual agreements . . . has nothing to do with market power, ultimate consumers' welfare, or antitrust.").

The court finds these decisions persuasive on the issue of whether a contractual restraint can by itself define a relevant product market. Contractual restraints such as the franchise agreements in Queen City Pizza and the distributorship agreements entered into between McLaughlin and Carpenter in the instant case almost, if not always, restrain a party's choices. To rely on the mere existence of a contractual restraint faced by a plaintiff to find that an antitrust defendant has market power would result in untenable results as scores of lawful business arrangements and agreements would become violations of the antitrust laws. Furthermore, the fact that a defendant or manufacturer such as Carpenter has power over its distributor by virtue of the distributorship says little regarding the issue of whether Carpenter (or Newcourt) had market power in the relevant product market.

The court also understands McLaughlin's position to be that it and other school bus distributors are locked-in to certain manufacturer distributorships because of costs in investments, information and switching from one manufacturer to another. A similar argument was made by the plaintiffs in Queen City Pizza who were presented with costs in exiting the Domino's franchise system, including information costs, switching costs, lost investment costs, and start-up costs associated with a new business venture. Queen City Pizza, 124 F.3d at 439 n. 9. The Third Circuit distinguished Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (1992), upon which McLaughlin relies. In Eastman Kodak the Supreme Court held that a market for repair parts and services for Kodak photocopiers was a relevant market because repair parts and services for Kodak copiers were unique and thus not interchangeable with the service and parts for other copiers. Id. at 482. The Third Circuit explained that Eastman Kodak does not hold that the information and switching costs alone creates a relevant market where one would not otherwise exist. Queen City Pizza, 124 F.3d at 439. The court reiterated that the plaintiffs had to purchase the Domino's-approved ingredients and supplies not because of Domino's market power, but because their franchise agreements required them to do so. Id. at 441.

The court concludes that McLaughlin has not produced sufficient evidence to raise a genuine issue of material fact regarding the relevant product market for its tying claim. This failure alone entitles Newcourt to summary judgment on the tying claim as well as the other antitrust claims for which McLaughlin must prove the relevant product market. See, e.g., Nelson, 925 F.2d at 1572 (Cudahy, J., concurring) (stating that "the ultimate question of market power may not be reached before a showing of a relevant market (both product and geographic)").

Newcourt further contends that McLaughlin has not properly defined the relevant geographic market. Dr. McCutcheon opines that the relevant geographic market is "defined by McLaughlin's distributorship agreements with Carpenter." (McCutcheon Rep. 2/5/01 ¶ 5.) The court has concluded that this opinion is inadmissible, see supra, Section IV. and, therefore, it fails to create an issue of fact.

Newcourt submits that in any event this is not a proper definition of a relevant geographic market. The Plaintiff does not directly refute the Defendants arguments regarding the relevant geographic market. Instead, it asserts that the relevant geographic market is a question of fact for the trier of fact to be based on "the commercial reality" and that "customers were restricted to McLaughlin as a source within his territory." (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 15, 16.) However, as with any other issue, the definition of the relevant geographic market is subject to summary judgment if the plaintiff fails to produce sufficient evidence from which a trier of fact could find in its favor. See, e.g., Bathke v. Casey's Gen. Stores, Inc., 64 F.3d 340, 345 (8^th Cir. 1995); see also Tunis Bros. Co. v. Ford Motor Co., 952 F.2d 715, 726 (3^d Cir. 1991) (plaintiff bears burden of proving relevant geographic market). Thus, McLaughlin must offer some evidence to establish what the "commercial reality" was in support of its claimed geographic market.

The assertion that customers within McLaughlin's territory could only purchase a Carpenter bus from McLaughlin fails to establish the relevant geographic market. Even if this were true (and there is evidence in the record of competition among Carpenter dealers in sales to end users ( see Goldsmith Aff., Ex. 36, Answer to Interrog. No. 3 at 8-9), it does not sufficiently define the relevant geographic market. "The relevant geographic market is the area in which a potential buyer may rationally look for the goods or services he or she seeks[.]" Tunis Bros., 952 F.2d at 726 (quotation omitted); see also Discon Inc. v. NYNEX Corp., 86 F. Supp. 2d 154, 160 (W.D.N.Y. 2000) (defining relevant geographic market as "the area to which consumers can practically turn for alternative sources of the product."). Thus, "'the geographic market is not comprised of the region in which the seller attempts to sell its product, but rather is comprised of the area where his customers would look to buy such a product.'" Lantec, Inc. v. Novell, Inc., 306 F.3d 1003, 1027 (10^th Cir. 2002) (quoting Tunis Bros, 952 F.2d at 726); see also Surgical Care Ctr. of Hammond, L.C. v. Hosp. Serv. Dist. No. 1 of Tangipahoa Parish, 309 F.3d 836, 840 (5^th Cir. 2002) (concluding plaintiff failed to meet its burden of offering sufficient evidence to define the relevant geographic market where its expert relied solely on the definition of the defendant's service area and failed to identify competitors); Minn. Ass'n of Nurse Anesthetists v. Unity Hosp., 208 F.3d 655, 662 (8^th Cir. 2000) (stating that "a seller's trade area is not necessarily the relevant geographic market for purposes of antitrust analysis"); Morgan, Strand, Wheeler Biggs v. Radiology, Ltd., 924 F.2d 1484, 1490 (9^th Cir. 1991) (concluding that where the plaintiff company competes does not define the relevant geographic market). As a result, the relevant geographic market is not defined by the area in which the plaintiff attempts to sell its product under an exclusive distributorship agreement and not defined by the distributorship agreements themselves.

McLaughlin's definition of the relevant geographic market fails to identify and account for the limitations that school bus customers placed on themselves. In other words, if a school bus customer in McLaughlin's territory wanted to purchase a school bus, did the customer limit itself to Carpenter buses, and did the customer limit itself to the geographic area defined by McLaughlin's distributorship agreement? McLaughlin assumes that customers were restricted to purchasing school buses within its distributorship territory and fails to offer any evidentiary support for this assumption.

As stated by the Tenth Circuit, the determination of the relevant geographic market turns on several factors, including "price data and such corroborative factors as transportation costs, delivery limitations, customer convenience and preference, and the location and facilities of other producers and distributors." Lantec, 306 F.3d at 1027 (quoting T. Harris Young Assocs., Inc. v. Marquette Elecs., Inc., 931 F.2d 816, 823 (11^th Cir. 1991)). McLaughlin's assertion based on the McCutcheon opinion that the relevant geographic market is defined by its distributorship agreements with Carpenter is not sufficiently supported by evidence of these factors.

The court concludes that McLaughlin has offered insufficient evidence to create a genuine issue of material fact as to its asserted definition of the relevant geographic market. Consequently, Newcourt should be granted summary judgment on the tying claim as well as the other antitrust claims for which McLaughlin must prove the relevant product market. See, e.g., Nelson, 925 F.2d at 1572 (Cudahy, J., concurring) ("the ultimate question of market power may not be reached before a showing of a relevant market (both product and geographic)").

Moreover, even if McLaughlin had offered sufficient evidence to establish the relevant product and geographic markets, Newcourt would be entitled to summary judgment on the antitrust claims because McLaughlin has insufficient evidence of market power. As addressed supra, see Section IV., McLaughlin has not raised a genuine issue regarding market power in any tying market through Dr. McCutcheon's opinions.¹² And, if the relevant tying market is assumed to be the market for Carpenter distributorships, McLaughlin has offered no evidence to raise an inference that Carpenter or Newcourt had market power in that market. Nothing in the record reasonably suggests that Carpenter or Newcourt raised the price for Carpenter distributorships above that which would have been charged in a competitive market without losing its business. See Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 109 n. 38 (1984); 42nd Parallel North v. E Street Denim Co., 286 F.3d 401, 405 (7^th Cir. 2002). Indeed, the court is unable to discern from McLaughlin's evidentiary submissions what the price was, if any, which was charged for "Carpenter distributorships."

12 Dr. McCutcheon asserted that Carpenter had a 13% market share of type 1 bus sales sold to school districts in the state of Minnesota. (McCutcheon Dep. 2/6/01 at 27-28.) Even assuming that this market share was based on a relevant product and geographic market, this evidence fails to raise a reasonable inference that Carpenter had market power. See, e.g., Hardy v. City Optical Inc., 39 F.3d 765, 767 (7^th Cir. 1994) (identifying 30% as "the minimum market share" from which one can infer the market power required for a tying case); Valley Liquors, Inc. v. Renfield Imps., Ltd., 822 F.2d 656, 666 (7^th Cir. 1987) ("Market share analyses in section 1 cases have led to conclusions that approximately 70%-75% of market share constitutes market power, and that a 20%-25% market share or less does not constitute market power.") (citations omitted).

McLaughlin disputes Newcourt's contention that it has no direct evidence of market power. For support, however, McLaughlin cites to the Goldsmith Affidavit, Exhibits 1, 44, 45, 74 and 75, in their entirety. ( See Pl.'s Mem. Resp. at 17.) These exhibits are Timothy McLaughlin's deposition consisting of over 430 pages; the entire depositions of Harlow and Hartley Hageness; Dr. McCutcheon's report of approximately 12 single-spaced pages, 35 paragraphs and 31 footnotes; her 15-page affidavit of April 15, 1999. As explained supra, such nonspecific citations to entire documents is insufficient to raise a genuine issue of triable fact. The court is not required, and declines, to read through page after page of these exhibits in search of the evidentiary support for McLaughlin's position that it does have direct evidence of market power. Dr. McCutcheon's opinion regarding market power is inadmissible in any event, see supra Section IV. McLaughlin even fails to specify what form this market power takes.

McLaughlin further claims that the alleged tying arrangement resulted in an increase in the price of school buses. ( See, e.g., Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 11 (citing Goldsmith Aff., Ex. 44 at 6-9, 23 Ex. 45 at 6-8.)) But as addressed infra, this testimony from the Hagenesses is insufficient to raise a reasonable inference of a price increase in the relevant product or geographic market. McLaughlin also claims that the tying arrangement caused a reduction in output in that upon its termination as a Carpenter dealer, Carpenter buses were no longer sold in North Dakota, South Dakota and eastern Montana. (Pl.'s Mem. Resp. at 11.) Evidence that McLaughlin no longer sold Carpenter buses in these areas, however, fails to suggest a reduction in output in the relevant market. This evidence does not account for the sales of non-Carpenter brands of school buses in this area. In any event, the elimination of all sales of Carpenter buses in this area would be insufficient to raise a reasonable inference of a reduction in output in the relevant geographic market as McLaughlin has not shown that North Dakota, South Dakota and eastern Montana is a relevant geographic market. Similarly, McLaughlin has not shown that a reduction in the number of brands available in this particular area should or can reasonably be equated with a reduction in overall output.

The Plaintiff asserts that Carpenter's market power was absolute because it controlled the tying product of its distributorships. (Pl.'s Mem. Resp. at 17.) Under Seventh Circuit case law, a company cannot be said to have monopoly power (and thus market power) in its own product "absent proof that the product itself has no economic substitutes[.]" Elliott v. United Center, 126 F.3d 1003, 1005 (7^th Cir. 1997). McLaughlin has not presented sufficient evidence to raise a genuine issue as to the absence of any acceptable substitutes for Carpenter distributorships. McLaughlin submits that Carpenter's ability to discriminate in prices to its distributors and its ability to force the Newcourt floor plan on its dealers is evidence of its market power. But these things fail to raise a reasonable inference of market power — they reveal nothing about the price of a Carpenter distributorship, or for that matter, a Carpenter bus, and wholly fail to support a finding that the price for either a Carpenter distributorship or bus was above that which would be fetched in a competitive market. Furthermore, even assuming Carpenter had the ability to force the Newcourt floor plan on its dealers, this is the alleged tie challenged by McLaughlin, and proof of a tie generally cannot suffice to show market power. See Grappone, Inc. v. Subaru of New England, Inc., 858 F.2d 792, 796 (1^st Cir. 1988) ("the 'market power' hurdle is moderately high — that it cannot ordinarily be surmounted simply by pointing to the fact of the tie itself").

The Plaintiff argues that because it was locked into its Carpenter distributorship, its share of the relevant market is irrelevant as was Eastman Kodak's share of the copier business in Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (1992). McLaughlin, however, has failed to produce sufficient evidence to raise an inference that it was locked into a Carpenter distributorship. To the extent the Plaintiff claims it was locked in because of its "sunk costs" into the Carpenter distributorship, the court declines to equate sunk costs with market power. See Tominaga v. Shepherd, 682 F. Supp. 1489, 1494 n. 4 (C.D. Cal. 1988) (explaining that the sunk costs of the investment in a franchise arrangement " has nothing to do with market power"). Moreover, Eastman Kodak is distinguishable because there the Court concluded that the tying product market was Kodak parts and parts for Kodak equipment were unique and not interchangeable. Id. at 456-57, 463-64. McLaughlin has offered inadequate evidence to show that Carpenter buses are unique and not interchangeable with other brands of school buses.

McLaughlin has offered insufficient evidence of Carpenter's market power in the tying market. Therefore, McLaughlin has insufficient proof that the alleged tying arrangement between Carpenter buses and the Newcourt floor plan financing had an anticompetitive effect. Accordingly, Newcourt is entitled to summary judgment on McLaughlin's tying claim.

Another basis exists for granting summary judgment on the tying claim. An essential element of a tying claim is market power in the tied product market. See A.O. Smith Corp. v. Lewis, Overbeck , 979 F.2d 546, 549-50 (7^th Cir. 1992); Carl Sandburg Vill. Condo. Ass'n No. 1 v. First Condo Dev. Co., 758 F.2d 203, 210 (7^th Cir. 1985). Thus, an antitrust plaintiff "must prove the substantial danger that defendant will acquire market power in the tied [product] market[.]" A.O. Smith Corp., 979 F.2d at 550 (stating that Sandburg Village "explicitly requires the showing of substantial danger of tied market power"). The Plaintiff contends that in the Seventh Circuit for purposes of a per se tying claim, proof of a substantial danger that the tying defendant will acquire market power in the tied product market is not required. The cases upon which it relies, however, do not support this contention. See, e.g., Parts Elec. Motors, Inc. v. Sterling Elec., Inc., 826 F.3d 712, 718-19 (7^th Cir. 1987) (court did not address whether proof of market power in the tied market is required because the issue was not preserved on appeal).

McLaughlin identifies the tied product market as "the financing of Carpenter buses." (Pl.'s Mem. Resp. at 17.) However, McLaughlin has insufficiently supported its definition of the tied product market. For support, it cites to the entire McCutcheon affidavit, and Exhibits 1, 53, 54 and 73 of the Goldsmith Affidavit. No specific page citations are given. Exhibit 1 is a copy of the entire transcript of the 11/29/00 deposition of Tim McLaughlin and consists of approximately 430 pages. Exhibit 53 consists of copies of two letters to McLaughlin from SerVaas Incorporated dated October 2, 1995, discussing the Newcourt floor plan. Exhibit 54 is a copy of a memorandum to Carpenter distributors from Tim Durham, dated December 1, 1995, regarding the Newcourt floor plan. Exhibit 73 consists of copies of two letters regarding the termination of the Carpenter dealership held by Tillery Chevrolet-GMC. The court cannot discern how any of these exhibits supports McLaughlin's assertion that the tied product market was "the financing of Carpenter buses." Thus, the court concludes that McLaughlin has produced insufficient evidence to establish that the tied product market was as it claims.¹³

13 Even if the relevant tied product market is the financing of Carpenter buses, the Plaintiff's evidence is nonetheless insufficient to establish a substantial danger that Newcourt would acquire market power in the relevant market. The undisputed evidence is that a dealer was required to floor plan its buses only while they were at Carpenter; once a dealer picked up its Carpenter buses, it could pay for them with its own money or with funds obtained from alternative financing (Rost 2/7/01 Dep. at 7-8, 33, 111; Mar. 16, 1995 Memo from Whitesell to All Distributors), and there is evidence that dealers did so (Gorman Dep. at 6-7; Rost 2/7/01 Dep. at 6-7; Gerdes Dep. at 8-10). McLaughlin has not produced evidence of any danger that Newcourt (or Carpenter) could raise the costs of financing Carpenter buses above a competitive level without losing financing business to these other sources once the buses were picked up by the dealers. Thus, McLaughlin has failed to show a substantial danger that Newcourt would obtain market power in the tied product market of financing Carpenter buses, which is another basis upon which summary judgment must be granted Newcourt on the tying claim. See, e.g., A.O. Smith Corp., 979 F.2d at 550 (an antitrust plaintiff "must prove the substantial danger that defendant will acquire market power in the tied [product] market").

It seems that the relevant tied product market is some financing market. Even McLaughlin's expert suggests that the tied product was "financing." (McCutcheon Rep. 2/5/01 ¶¶ 20, 21.) McLaughlin has offered insufficient evidence to raise a genuine issue as to whether there was a substantial danger that Newcourt (or Carpenter) would acquire market power in a financing market. McLaughlin offers no evidence of Newcourt (or Carpenter's) market power (the ability to raise prices above a competitive level without losing its business, see 42nd Parallel North v. E Street Denim, 286 F.3d 401, 405 (7^th Cir. 2002), in financing. Its expert conducted no investigation or analysis of the financing market or the market for floor plan financing. (McCutcheon Dep. 2/6/01 at 91.)

Even assuming that McLaughlin could raise a reasonable inference of market power, the Defendants still would be entitled to summary judgment on the tying claim. McLaughlin has offered insufficient evidence to raise an inference that it suffered an antitrust injury. An "antitrust injury" is an "injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). The "injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation" and be the type of loss that the claimed violations . . . would be likely to cause." Id. (quotation omitted). Further, the antitrust injury requirement "ensures that the harm claimed by the plaintiff corresponds to the rationale for finding a violation of the antitrust laws in the first place" and "ensures that a plaintiff can recover only if the loss stems from a competition-reducing aspect or effect of the defendant's behavior." Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 342, 344 (1990).

"[T]he objective of the tying doctrine is to protect competition in the tied market[.]" Parts Elec. Motors, Inc. v. Sterling Elec., Inc., 866 F.2d 228, 235 (7^th Cir. 1988); see also Carl Sandburg, 758 F.2d at 210 ("the goal of the antitrust laws in the tying context is to prevent the economically harmful effects of tie-ins in cases where a seller's power in the market for the tying product is used to create additional power in the market for the tied product"). Thus, what makes the alleged tying arrangement a violation of the antitrust laws is the risk of an adverse effect on competition in the tied market, whether in terms of output or price. McLaughlin has offered no evidence to raise a triable issue as to whether it suffered an injury because of a reduction in output or increase in price in a tied market. It is undisputed that McLaughlin did not sign up for the Newcourt floor plan; thus, it faced no price increase or otherwise noncompetitive price in the alleged tied product. McLaughlin contends that the costs for applying and maintaining the floor plan were significant, even if the plan was not used, but it does not provide evidence to show that it applied for or maintained the floor plan.

McLaughlin's alleged injury, the termination of its Carpenter distributorship, does not flow from an anticompetitive effect in the market for the tied product, whether the market is defined as the market for floor plan financing of Carpenter buses or the financing market generally. And, the loss of the distributorship is not the type of loss that a claimed tying arrangement would be likely to cause. Therefore, the court concludes that McLaughlin cannot raise a reasonable inference that its injury flowed from the anticompetitive effects of the tying arrangement of the Newcourt floor plan to the sale of Carpenter buses. Because this prohibits McLaughlin from showing antitrust injury resulting from the tying arrangement, Newcourt is entitled to summary judgment on the tying claim. See Chicago Prof'l Sports Ltd. P'ship v. Nat'l Basketball Assoc., 961 F.2d 667, 670 (7^th Cir. 1992) (stating that the antitrust injury doctrine "requires every plaintiff to show that its loss comes from acts that reduce output or raise prices to consumers.") (citations omitted).

Newcourt is correct that it is entitled to judgment as a matter of law on McLaughlin's per se group boycott/concerted refusal to deal claim under Section 1 of the Sherman Act. As the Supreme Court recently stated in NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 130 (1998) (holding that the per se group boycott rule did not apply to a buyer's decision to buy from one seller rather than another, characterized as a vertical agreement and vertical restraint), "precedent limits the per se rule in the boycott context to cases involving horizontal agreements among direct competitors." Id. at 135; see also id. at 138 ("antitrust law does not permit the application of the per se rule in the boycott context in the absence of a horizontal agreement"); Business Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 730 (1988) ("Restraints imposed by agreement between competitors have traditionally been denominated as horizontal restraints"); Klor's, Inc. v. Broadway-Hale Stores, 359 U.S. 207, 212, 212-13 (1959) (stating that "[g]roup boycotts, or concerted refusals by traders to deal with other traders, have long been held to be in the forbidden category" and noting that the complaint alleged "a wide combination consisting of manufacturers, distributors and a retailer.").

One circuit court of appeals recently indicated that:

Although the distinction between boycotts that are per se illegal and those judged by the rule of reason is often a vexing one, one rule is clear: only horizontal boycotts can be per se violations of the Sherman Act. . . . Thus, in order to bring its boycott claim within the per se rule, Spectators' must point to a horizontal conspiracy, in other words, a conspiracy between competitors.

Spectators' Comm. Network Inc. v. Colonial Country Club, 253 F.3d 215, 223 (5^th Cir. 2001) (holding the plaintiff failed to establish a horizontal conspiracy subject to per se rule where it had no evidence of an agreement among competitors); see also Toys "R" US, Inc. v. FTC, 221 F.3d 928, 936 (7^th Cir. 2000) (stating that horizontal agreements among competitors such as group boycotts are per se illegal); Nova Designs, Inc. v. Scuba Retailers Ass'n, 202 F.3d 1088, 1092 (9^th Cir. 2000) (concluding that since the alleged conspirators were not competitors, the district court correctly concluded that the per se rule for group boycotts did not apply).

Even assuming that McLaughlin can establish a conspiracy between Newcourt and Carpenter, its per se group boycott claim cannot survive summary judgment. Newcourt and Carpenter are not competitors. Therefore, the alleged conspiracy was not a horizontal agreement and not subject to the per se rule. Newcourt is entitled to judgment as a matter of law on the per se group boycott claim.

The court agrees with Newcourt that McLaughlin's antitrust claim for "constructive termination" as a Carpenter dealer is the same as its rule of reason group boycott claim. Both claims are premised upon the claim that Carpenter and Newcourt conspired to terminate McLaughlin as a Carpenter dealer and both are alleged to violate Section 1 of the Sherman Act.

The alleged constructive termination of a McLaughlin as a Carpenter dealer is a vertical restraint. See Crane Shovel Sales Corp. v. Bucyrus-Erie Co., 854 F.2d 802, 806 (6^th Cir. 1988) (stating that a manufacturer's substitution of one distributor for another is considered a vertical restraint of trade). In Business Electronics, the Supreme Court held that a "vertical restraint is not illegal per se unless it includes some agreement on price or price levels." 485 U.S. at 735-36; see also NYNEX Corp., 525 U.S. at 136 (declaring the per se rule inapplicable to the case which involved only a vertical agreement and vertical restraint that took the form of depriving a supplier of a potential customer).

McLaughlin responds that it has presented sufficient evidence to, at a minimum, create a jury question as to whether its constructive termination was a non-price vertical restraint. It asserts that there were specific communications and an agreement between Carpenter and Newcourt on the amount of all competitive allowances. (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 20 (citing Goldsmith Aff., Exs. 4, 5, 15, 66, 67.)). None of this evidence cited by McLaughlin, however, raises a reasonable inference that Carpenter and Newcourt had an agreement on price or price levels. It merely establishes that Carpenter informed Newcourt of its prices. Therefore, McLaughlin has come forward with insufficient evidence to create an issue as to whether its constructive termination or the group boycott by Carpenter and Newcourt was a price vertical restraint and thus per se illegal. See NYNEX, 525 U.S. at 136 ("a 'vertical restraint is not illegal per se unless it includes some agreement on price or price levels'") (quoting Business Elecs., 485 U.S. at 735-36).

"The first requirement in every suit based on the Rule of Reason is market power, without which the practice cannot cause those injuries . . . that matter under the federal antitrust laws." Menasha Corp. v. News Am. Mktg In-Store, Inc., 354 F.3d 661, 663 (7^th Cir. 2004). As stated, there are two ways to prove market power. Toys "R" Us, Inc. v. FTC, 221 F.3d 928, 937 (7^th Cir. 2000). The first way is with direct evidence of anticompetitive effects in the relevant market, id., that is, a reduction in output or increase in price to consumers in the relevant market, see Generac Corp. v. Caterpillar Inc., 172 F.3d 971, 978 (7^th Cir. 1999); Tops Mkts., Inc. v. Quality Mkts., Inc., 142 F.3d 90, 96-97 (2nd Cir. 1998). In determining whether the challenged restraint has an anticompetitive effect in the relevant market, the court looks to "the challenged restraint's effects on both intrabrand and interbrand competition." 42nd Parallel North, 286 F.3d at 404-05 (citing Valley Liquors, Inc. v. Renfield Imps., Ltd., 678 F.2d 742, 745 (7^th Cir. 1982)). The second way is with evidence of market power. Id.

Newcourt contends that McLaughlin has no evidence of any adverse effect on competition in the relevant market — either an increase in the price of school buses or a decrease in output — as a result of its constructive termination as a Carpenter dealer. Newcourt also contends that McLaughlin has no evidence of its market power. McLaughlin argues that the evidence establishes a restriction on output as a result of the alleged conspiracy between Newcourt, Durham, and Carpenter — Carpenter buses were no longer sold in McLaughlin's territory in North Dakota, South Dakota and eastern Montana. ( See Pl.'s Mem. Resp. at 11.) For support, the Plaintiff cites Exhibits 74, 75, 44 and 45 to the Goldsmith Affidavit, which are the February 5, 2001, expert report of Dr. McCutcheon, her affidavit of April 15, 1999, and the deposition transcripts of Harlow Hageness and Hartley Hageness, respectively. McLaughlin submits that an increase in the price of buses in this territory accompanied the decrease in output.

Newcourt moves to strike the citation to the entire McCutcheon report and affidavit. The motion is well-taken. The report is over ten pages in length, is single-spaced and contains 31 footnotes. The court is not required to search through the document to find the specific support, if any, which may lie within. As the party opposing a summary judgment motion, McLaughlin is under an obligation to direct the court to specific facts in the record. See, e.g., Schuster v. Lucent Techs., Inc., 327 F.3d 569, 579 (7^th Cir. 2003) (stating that under Rule 56 the party opposing summary judgment must point to specific facts to raise a genuine issue for trial); Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 898 (7^th Cir. 2003) ("We have repeatedly assured the district courts that they are not required to scour every inch of the record for evidence that is potentially relevant to the summary judgment motion before them."). The cited affidavit of Dr. McCutcheon is approximately 15 pages in length and contains 29 numbered paragraphs. The court is not required to sift through the entire affidavit in search of evidentiary support for McLaughlin's assertion that there was a restriction in output. See, e.g., Schuster, 327 F.3d at 579; Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 923 (7^th Cir. 1994) (rejecting plaintiff's argument that her failure to comply with Rule 56.1 was immaterial since the evidence which created a disputed facts could be found in her expert's affidavit submitted with her memorandum where affidavit was 15-pages in length).

The cited pages of the Hagenesses' depositions discuss prices and margins, but do not address changes in output in the relevant market following the termination of McLaughlin's Carpenter distributorship. Thus, McLaughlin has not pointed to any record evidence to raise a reasonable inference that the alleged conspiracy between Newcourt, Durham and Carpenter or its constructive termination as a Carpenter dealer resulted in any restriction in output. Moreover, McLaughlin offers no evidence to establish that the mere reduction in the number of brands of conventional school buses (by 25% from four to three) upon McLaughlin's termination as a Carpenter dealer correlated with a reduction in actual output of school buses. See Discon, 86 F. Supp.2d at 164 (stating that the plaintiff's "conclusory statement that output was reduced is not supported by any evidence that there were fewer sales . . . in the market generally. . . . Discon's elimination from the market simply does not equate to 'reduced output.'").

Further, McLaughlin's evidence is insufficient to raise a genuine issue as to a resulting increase in prices of school buses in its former Carpenter sales territory. The Hagenesses testified that once McLaughlin stopped selling Carpenter buses, prices in their territories as well as their margins went up a bit. (Harlow Hageness Dep. at 6; Hartley Hageness Dep. at 4-5.) The territories covered by the Hagenesses, however, only included part of McLaughlin's former Carpenter sales territory. More specifically, Harlow's territory, or that of Harlow's Bus Sales, Inc., during the relevant time, was North Dakota, South Dakota, Montana, Wyoming and Idaho. (Harlow Hageness Dep. at 4.) Hartley's School Buses Inc.'s territory was North Dakota and Montana. (Hartley Hageness Dep. at 3.) This evidence therefore is insufficient to support a reasonable inference that prices increased throughout the relevant market, assuming that McLaughlin's former Carpenter sales territory, which included Minnesota, is the relevant geographic market (see Pl.'s Mem. Resp. at 16 17 (referring to McLaughlin's territory as the relevant geographic market)).

Moreover, neither McLaughlin nor the Hagenesses' testimony shows that the Hagenesses have personal knowledge of the prices of school buses involved in any sale within their own territories with which their companies were not involved. It is undisputed that there was another dealer selling school buses in North Dakota, South Dakota and Montana. McLaughlin offers no evidence of the prices and margins of this dealer. In addition, though McLaughlin would like to create a reasonable inference that the increased prices and margins of the Hagenesses, two of the three dealers in the area, raises a reasonable inference of an increase throughout the market, McLaughlin does not submit any evidence of the number of sales or percentage of sales of all school buses that the Hagenesses had in the North Dakota, South Dakota and Montana area. Without a hint of such information, it would not seem reasonable to infer that there was an anticompetitive effect throughout the market.

But even more importantly, there is evidence that once McLaughlin ceased operating as a Carpenter distributor in 1996, Minnesota Body Equipment Company ("Minnesota Body") stepped in and distributed Carpenter buses in the northern and western portions of Minnesota which had been a part of McLaughlin's sales territory and continued to do so until 2000. (Rost Aff. ¶¶ 2-3.) Thus, the evidence reveals that the reduction in brands did not occur throughout the entirety of McLaughlin's former sales territory. And, McLaughlin offers absolutely no evidence regarding any anticompetitive effects in the portions of Minnesota which had been part of its former Carpenter sales territory.

The Plaintiff's expert testified only that McLaughlin's termination as a Carpenter dealership may have resulted in increased prices, and she has no evidence that they did in fact increase. (McCutcheon Rep. 2/5/01 ¶ 18; McCutcheon Dep. 4/30/98 at 76-77.) Such testimony, even from an expert, is insufficient to establish an adverse effect on competition and avoid summary judgment. See Tops Mkts., 142 F.3d at 96 (plaintiff's expert's affidavit that prices could have been "potentially higher" failed to establish detrimental effect on competition).

The court concludes that McLaughlin has offered insufficient direct evidence to raise a reasonable inference that it had market power. In other words, it has produced insufficient evidence regarding either a reduction in output or increase in price to consumers in the relevant market as a result of its termination as a Carpenter dealer. So, if it were to prevail on its group boycott/constructive termination claim, it would have to be with indirect evidence of market power, that is, evidence of its market share. For the reasons discussed supra, McLaughlin has offered insufficient evidence of market share. Therefore, Newcourt should be granted summary judgment on the rule of reason group boycott/constructive termination claims.

The next antitrust claim for consideration is the allegation of commercial bribery in violation of Section 1 of the Sherman Act and Section 2(c) of the Robinson-Patman Act. While it is true that Newcourt's initial papers did not discuss this claim, in the court's view, the claim was not apparent from the Amended Complaint. Newcourt in its reply brief offers several arguments why it should be granted summary judgment on this claim, and by filing its surreply, McLaughlin has had a sufficient opportunity to respond to these arguments, even though they were not raised in Newcourt's opening brief.

Even assuming that the transaction at issue involving Newcourt's alleged payments to Durham involved the sale of commodities such that the Robinson-Patman Act applies, McLaughlin cannot prevail on its commercial bribery claim. As Newcourt contends, to violate § 2(c) of the Act, the payment must cross the "seller-buyer line." See, e.g., Bridges v. MacLean Stevens Studios, Inc., 201 F.3d 6, 11 (1^st Cir. 2000); Hix Corp. v. Nat'l Screen Printing Equip. Inc., 108 F. Supp. 2d 1204, 1206-07 (D. Kan. 2000). "In order to find a violation of section 2(c), 'the payments involved must be made to a party to the transaction or to someone connected with that party in an agency, representative, or intermediary relationship.'" Bridges, 201 F.3d at 11 (quoting Rangen, Inc. v. Sterling Nelson Sons, Inc., 351 F.2d 851, 862 (9^th Cir. 1965)); see also Bridges, 201 F.3d at 11 (noting that the "circuit court cases finding commercial bribery in violation of section 2(c) all involve the corruption of an agency or employment relationship.") (quoting Stephen Jay Photog., Ltd. v. Olan Mills, Inc., 903 F.2d 988, 993 (4^th Cir. 1990)).

Though McLaughlin submits that there is an issue of fact as to whether Durham was acting on behalf of the dealers in negotiating terms with Newcourt (Pl.'s Surreply at 6-7), McLaughlin offers no evidence to raise a reasonable inference that Durham acted as its (or any other dealer's) agent, representative or intermediary or had any control over its financing decisions. This makes Grace v. E.J. Kozin Co., 538 F.2d 170 (7^th Cir. 1976), cited by the Plaintiff to support its argument that § 2(c) applies to commercial bribery of a buyer's agent, distinguishable.¹⁴ Because McLaughlin cannot established the relationship between necessary under § 2(c) of the Robinson-Patman Act, it cannot withstand summary judgment on its commercial bribery claim.

14 There, the plaintiff Grace was the bankruptcy trustee for S.I. Greene Company, a competitor of the defendant E.J. Kozin. Kane, Greene's vice-president and sales manager, arranged for Greene to purchase substantial quantities of seafood from Kozin and convinced Kozin to allow him to represent it as a sales agent to customers other than Greene. In exchange, Kozin agreed to pay Kane one-half of all profits made on purchases by Kane on behalf of Greene and the other customers to whom Kane sold Kozin seafood. Grace, 538 F.2d at 172. The court found that Kozin and Kane had entered into a joint enterprise "whereby they purchased seafood products and resold them to Greene and other companies." Id. at 173. Kane clearly was an agent and employee of Greene. In addition, Greene and Kozin were competitors, whereas, McLaughlin and Newcourt/Carpenter are not competitors.

As for the commercial bribery claim under section 1 of the Sherman Act, Newcourt argues that the claim is subject to the rule of reason analysis and fails because McLaughlin has not defined the relevant market and has not shown that Newcourt or Carpenter had market power or any actual market wide competitive effects resulting from the alleged antitrust violation. Those arguments have been fully addressed in this entry and need not be repeated here. Suffice to say, Newcourt is entitled to summary judgment on the commercial bribery claim under section 1 of the Sherman Act for the same reasons it is entitled to summary judgment on McLaughlin's Sherman Act tying claim.

It follows then that summary judgment should be granted on the unreasonable restraint of trade claims including price fixing and refusal to deal asserted under Minnesota law, namely Minnesota Statutes §§ 325D.51, 325D.53, subd. 1(1) and subd. 1(3) as well as 325D.54. Minnesota antitrust laws are interpreted consistently with federal construction of federal antittrust laws. See Minn. Twins P'ship v. State ex. rel. Hatch, 592 N.W.2d 847, 851 (Minn. 1999); State by Humphrey v. Alpine Air Prods., Inc., 490 N.W.2d 888, 894 (Minn.App. 1992), aff'd, 500 N.W.2d 788 (Minn. 1993).

McLaughlin argues that claims under § 325D.53, subd. 1(3) are treated differently because the statute was enacted before the federal courts weakened the breadth and scope of per se group boycotts. The provision makes an unlawful and unreasonable restraint of trade or commerce: "A contract, combination, or conspiracy between two or more persons refusing to deal with another person[.]" Minn. Stat. § 325D.53, subd. 1(3). Plaintiff argues that under the plain meaning of the statute, liability attaches when two persons agree to refuse to deal with a third person. It cites to Minnesota Statute § 645.16 for the proposition that under Minnesota statutory construction, the plain meaning controls unless there is an ambiguity.¹⁵

15 The provision provides in part that: "When the words of a law in their application to an existing situation are clear and free from all ambiguity, the letter of the law shall not be disregarded under the pretext of pursuing the spirit." Minn. Stat. § 645.16.

The Minnesota court of appeals has said that since § 325D.53, subd. 1(3) does not require a restraint of trade between competitors, a vertical non-price restraint on trade arguably could be per se illegal under that statutory provision. Hough Transit, Ltd. v. Nat'l Farmers Org., 472 N.W.2d 358, 360-61 (Minn.Ct.App. 1991) (recognizing that vertical non-price restraints are never per se illegal under federal law). In Hough Transit, the plaintiff was a trucking business used by the defendant co-op to transport its members' milk. The co-op decided to discontinue the plaintiff's service and several of the farmers in the co-op asked a Hough Transit driver to start a milk hauling business. The co-op ceased using Hough Transit and entered into an exclusive dealing agreement with the driver. The plaintiff alleged claims under Minnesota antitrust law and urged the court to decline to follow federal construction of federal antitrust law and find that the vertical non-price restraint between the co-op and the driver constituted a per se violation of Minnesota antitrust law. Id. at 360-61. The court stated that the contract between the co-op and driver was "unlike the type of agreement classified as a refusal to deal" under § 325D.53, subd. 1(3). The court reasoned that though the contract effectively was a refusal to deal with the plaintiff, it also was a refusal to deal with every other milk hauler, and "[n]othing in the record indicate[d] there was a concerted effort . . . to refuse to deal specifically with [the plaintiff]." Hough Transit, 472 N.W.2d at 361. The court added that the contract did not prevent the plaintiff from hauling for other dairy farmers and had no significant anticompetitive effect. Id.

The Hough Transit court cited to Minnesota-Iowa Television Co. v. Watonwan T.V. Improvement Association, 294 N.W.2d 297 (Minn. 1980) for support. In that case, a television station and nonprofit organization entered into a contract for the organization to carry the station's signal. The contract provided that the organization would not carry any signal duplicating the television company's network programming. Id. at 301. The television station sued under the Minnesota antitrust provision prohibiting contracts by two persons refusing to deal with another person, Minnesota Statute § 325.8015, subd. 1(3), the predecessor to the current § 325D.53, subd. 1(3). The court held the contract did not constitute a refusal to deal and did not violate the statute. The court had several reasons for reaching this conclusion, including that the contract did not specifically refer to another party. Watonwan, 294 N.W.2d at 307.

Following the reasoning of Watonwan and Hough Transit, McLaughlin cannot withstand summary judgment on refusal to deal claim under § 325.D.53, subd. 1(3). McLaughlin has not shown that any agreement between Newcourt and Carpenter referred specifically to McLaughlin. And, as discussed previously, McLaughlin has come forward with insufficient evidence to raise a triable issue as to a significant anticompetitive effect of an agreement between Newcourt and Carpenter.

Furthermore, in its moving papers, Newcourt asserted it was unclear that McLaughlin had a cause of action under the Minnesota antitrust laws because neither McLaughlin or Newcourt had a place of business in Minnesota at the relevant time. Minnesota Statute § 325D.54 provides that §§ 325D.49 to 325D.66 apply to a contract or conspiracy "when any part thereof was created, formed, or entered into in this state" and a contract or conspiracy which "affects the trade or commerce of this state." McLaughlin has not alleged that Newcourt and Carpenter entered into a conspiracy in the State of Minnesota; therefore, it has to rely on the affect on trade or commerce in Minnesota. One court has said, with little discussion, that the latter language applies to purchases within Minnesota. See City of St. Paul v. FMC Corp., NO. CIV. 3-89-0466, 1990 WL 265171, at *7 (D. Minn. Feb. 27, 1990) (ruling on motion for judgment on the pleadings, motion to dismiss for lack of subject matter jurisdiction, and motion to limit class complaint). Newcourt contends that McLaughlin has produced no evidence of any economic impact in Minnesota (whether a price increase or reduced output), and argues there was no impact because when McLaughlin stopped selling Carpenter buses there, Minnesota Body took over servicing McLaughlin's former territory in Minnesota. (Rost Aff. ¶¶ 2-3.) The evidence produced by McLaughlin, as discussed previously, is insufficient to raise a triable issue as to whether there was an increase in price or reduction in output.

Therefore, for all these reasons, summary judgment should be GRANTED the Defendants on the antitrust claims under Minnesota Statute §§ 325D.51, 325D.53(1), 325D.53(3) and 325D.54.

B. COUNT II: RICO

According to Newcourt, it should be granted summary judgment on the RICO claims alleging that it violated 18 U.S.C. § 1962(a), (b), (c) and (d) by ratifying, aiding and abetting the conduct of the C-R-MB enterprise which caused injury to McLaughlin in the form of the loss of its prime Minnesota sales territory because such claims are time barred. Newcourt argues that it is entitled to summary judgment on the claims under all sections of § 1962 because McLaughlin lacks evidence on essential elements of the claims.

A civil RICO action is governed by the four-year statute of limitations borrowed from the Clayton Act. Rotella v. Wood, 528 U.S. 549, 553 (2000); Agency Holding Corp. v. Malley-Duff Assocs., Inc., 483 U.S. 143, 156 (1987). Thus, the statute of limitations bars any claim which accrued before November 22, 1994. A RICO action accrues when a plaintiff discovers, or through due diligence could have discovered, that it was injured. Klehr v. A.O. Smith Corp., 521 U.S. 179, 187-192 (1997) (holding that a civil RICO claim accrues when the plaintiff "should have discovered" his injuries, not upon the discovery of his injuries and the last predicate act of alleged racketeering). The injuries that McLaughlin claims it sustained because of the C-R-MB enterprise occurred no later than August 26, 1992, the date on which Carpenter terminated McLaughlin as a dealer in the "prime" Minnesota market. Therefore, each and every RICO claim against Newcourt based on its involvement in the C-R-MB enterprise is time-barred.¹⁶

16 McLaughlin says that it has withdrawn its C-R-MB enterprise RICO claims. (Pl.'s Mem. Resp. at 24 n. 30.) It has not formally withdrawn or dismissed such claims. Thus, summary judgment should be GRANTED Newcourt on such claims, and no further discussion is required.

In moving for summary judgment on the RICO claims, Newcourt specifically mentions the alleged Carpenter-SerVaas-Newcourt ("C-S-N") enterprise, but does not specifically mention the other enterprises alleged in paragraphs 70 through 76 of the Amended Complaint. McLaughlin implies, therefore, that its RICO claims involving these other alleged enterprises remain for trial. (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 23 n. 27.) However, in seeking summary judgment on the § 1962(a) claim, Newcourt contends that because McLaughlin has failed to show the use of racketeering income to acquire an interest in "an enterprise," it is entitled to summary judgment. (Br. Supp. Defs.' Mot. Summ. J. at 35.) This would include the other enterprises alleged in the Amended Complaint, although Newcourt did not specifically mention the other enterprises in its brief. As for the § 1962(b) claim, Newcourt specifically argued that McLaughlin cannot show that Newcourt's alleged interest in C-S-N or any other enterprise was acquired by Newcourt illegally, that is, through a pattern of racketeering. (Br. Supp. Defs.' Mot. Summ. J. at 37.) With respect to the § 1962(c) claim, Newcourt contended that McLaughlin could not prove extortion by Newcourt, that it was injured because of Newcourt's alleged extortion, and could not prove the predicate acts of mail fraud or wire fraud, or injury as a proximate cause of those acts. ( Id. at 40.) These contentions encompass all alleged enterprises, whether or not they were specifically mentioned in Newcourt's brief. The Defendants' arguments as to § 1962(d) are based on McLaughlin's alleged inability to establish that Newcourt agreed to violate the substantive subsections of § 1962, which also reply regardless of the alleged enterprise involved. Furthermore, with the exception of Newcourt's contention that McLaughlin cannot establish a RICO enterprise, its arguments advanced in support of its motion for summary judgment on the RICO claims are not expressly limited to the C-S-N enterprise only. Therefore, the court does not agree with McLaughlin that the RICO claims involving an alleged enterprise other than C-S-N necessarily remain for trial. Whether trial of such claims is necessary depends on the analysis of the RICO claims which follows.

McLaughlin alleges Newcourt violated § 1962(a) of RICO. That section makes it:

unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity . . . to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.

18 U.S.C. § 1962(a).

Newcourt makes two arguments of which the court quickly disposes. Newcourt cites National Organization for Women v. Scheidler, 510 U.S. 249, 259 (1994), for the proposition that under § 1962(a), the "enterprise" must be the victim of unlawful activity rather than the instrument through which unlawful activity is conducted. The case does not state or imply that an enterprise cannot be both a "victim" and an "instrument" and notes that under § 1961, which defines "enterprise," an "enterprise" may include a legitimate legal entity as the victim of the racketeering activity. Scheidler, 510 U.S. at 259. The Court also noted the four roles that an "enterprise" may play in § 1962: "prize," "instrument," "victim," and "perpetrator." Id. at 259 n. 5 (citation omitted). Newcourt also doubts whether a RICO could ever prove investment of racketeering income in an enterprise which was an association-in-fact, as the C-S-N enterprise is alleged to be, because an association-in-fact has no indicia of ownership which is capable of being acquired. Scheidler, which is cited for support, does not state or imply that an association-in-fact can never be an enterprise for purposes of § 1962(a). Moreover, an "enterprise" as defined under § 1961(4) can include an-association-in fact. 18 U.S.C. 1961(4); see also United States v. Turkette, 452 U.S. 576, 580 n. 9 (1981); In re Burzynski, 989 F.2d 733, 743 (5^th Cir. 1993).

Newcourt next contends that McLauglin has not offered any evidence that Newcourt invested money in an alleged enterprise, which defeats its § 1962(a) claim. McLaughlin's interrogatory answers, however, state that Newcourt reinvested revenue derived from alleged racketeering activity into the alleged enterprises, including the individual Newcourt enterprises. (Newcourt's App. Evid. Mats., Ex. 50, Pl.'s Ans. Newcourt Defs.' 2d Set Interrog. No. 8 at 31-32.)

On reply, Newcourt argues that the § 1962(a) claim fails for the additional reason that McLaughlin has no evidence that it was injured by Newcourt's use or investment of racketeering income rather than by the predicate acts by which the income was obtained. Though the Seventh Circuit has not directly addressed the issue, this court is in agreement with the majority of circuit courts and the district courts within the Seventh Circuit which have addressed the issue.¹⁷ Thus, the court concludes that in order to prevail on its claim under § 1962(a), McLaughlin must produce evidence to show that its injury was proximately caused by Newcourt's use or investment of the racketeering income; injury proximately caused by the predicate racketeering acts is insufficient. See Fortney v. Kuipers, No. 98 C 5387, 1999 WL 102772, at *11 (N.D. Ill. Feb. 22, 1999); see also Viacom, Inc. v. Harbridge Merch. Servs., Inc., 20 F.3d 771, 778-79, n. 6 (7^th Cir. 1994) (citing cases in the majority).

17 The Seventh Circuit, however, has observed that "the majority view is that the mere reinvestment of the racketeering proceeds into a business activity is not sufficient for § 1962(a) standing." Viacom, Inc. v. Harbridge Merch. Servs., Inc., 20 F.3d 771, 779, n. 6 (7^th Cir. 1994) (citing, e.g., Brittingham v. Mobil Corp., 943 F.2d 297, 305 (3d Cir. 1991) ("If [reinvestment] were to suffice, the use-or-investment injury requirement would be almost completely eviscerated when the alleged pattern of racketeering is committed on behalf of a corporation. . . . Over the long term, corporations generally reinvest their profits, regardless of source.")).

McLaughlin submits that it has evidence that Newcourt's use or investment of income from a pattern of racketeering proximately caused its injuries. It relies on evidence of compensation schedules and bonuses to Durham and Cochran based on implementation of the dealer floor plan and other expenses of implementing the floor plan, such as sending Cochran out into the field to allegedly harass dealers into signing up for the floor plan. (Pl.'s Surreply Defs.' Mot. Summ. J. at 20.)¹⁸ According to McLaughlin, "[t]hese activities and compensation structures harmed McLaughlin because they facilitated and encouraged the outrageous conduct directed at [McLaughlin]. It is this conduct that ultimately caused the termination of McLaughlin's distributorship." ( Id. at 21.)

18 As evidentiary support, McLaughlin cites to the Goldsmith Affidavit: Exhibit 46 at N-L0109, a copy of letter dated 6/30/94 from Bradley Nullmeyer of Newcourt to James Cochran offering terms of employment including provision of bonuses; Exhibit 47, documents related to Newcourt's employment of Tim Durham regarding bonuses; Exhibit 16 at N09713-14, a June 30, 1994 offer and terms of employment to Durham by Newcourt including provision for bonuses based on new vendors and volume; Exhibit 16 at N09709, a memo regarding Durham's 1995 bonus based on targeted active dealer floor plans, retail volume and gross profits; and Timothy McLaughlin's deposition, pages 111-13, 141-42 and 380. None of these documents, however, hint at showing how McLaughlin was proximately injured by Newcourt's use or investment of racketeering income.

In re American Honda Motor Co. Dealerships Relations Litigation, 941 F. Supp. 528 (D. Md. 1996), the only legal authority cited by McLaughlin, is inapposite. The case was before the court on a motion to dismiss, rather than a motion for summary judgment, as here. The court concluded that the plaintiffs sufficiently pled "investment use" injury by alleging that "corrupt Honda executives used the bribes and kickbacks they received to obtain ownership interests in existing or new dealerships," that Honda received income by paying its executives "substantially less than other manufacturers," and Honda used that income to finance its sales and allocation network. In re American Honda Motor Co., 941 F. Supp. at 548. McLaughlin has not alleged or offered any evidence that Durham or Cochran used any bonuses they received to obtain any such ownership interests in Carpenter dealerships. Nor has it alleged or proven that Newcourt in effect received income by paying Durham and Cochran, or anyone else for that matter, such bonuses in that Newcourt paid them substantially less than what they would have been paid absent the bonuses. And, McLaughlin has pointed to no evidence in the record to raise an inference that Newcourt used the income obtained from paying Durham and Cochran less money to implement or maintain its floor plan.

The court finds that McLaughlin has come forward with insufficient evidence to raise a genuine issue of fact as to whether Newcourt's use or investment of racketeering income proximately caused it any injury. Therefore, the court concludes that Newcourt should be GRANTED summary judgment on the § 1962(a) claim.

McLaughlin alleges that Newcourt violated § 1962(b), which provides in relevant part: "It shall be unlawful for any person through a pattern of racketeering activity . . . to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce." 18 U.S.C. § 1962(b). Thus, to prevail on a § 1962(b) claim, a plaintiff must show: (1) that the defendant acquired or maintained an interest in or control of a RICO enterprise through a pattern of racketeering activity, and (2) injury from the defendant's acquisition or maintenance of an interest in or control of a RICO enterprise, in addition to injury from the predicate acts. See Wagh v. Metris Direct, Inc., 348 F.3d 1102, 1111 (9^th Cir.) (requiring nexus between the control or acquisition of the enterprise and the racketeering activity), as amended 352 F.3d 1187 (9^th Cir. 2003); Advocacy Org. for Patients Providers v. Auto Club Ins. Ass'n, 176 F.3d 315, 328-29 (6^th Cir. 1999) (concluding that § 1962(b) claim should be dismissed where plaintiffs alleged defendants associated together in order to engage in a pattern of racketeering activity rather than that they acquired their interests in or control of the enterprise through the racketeering activity); Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1190 (3d Cir. 1993); see also Gagan v. Am. Cablevision, Inc., 77 F.3d 951, 960 (7^th Cir. 1996).

Newcourt seeks summary judgment on the § 1962(b) claim on the grounds that McLaughlin cannot show: (1) that it was injured by Newcourt's acquisition of an interest in the C-S-N enterprise rather than by the conduct of that enterprise, (2) that Newcourt's alleged interest in the C-S-N (or any other) enterprise was acquired by Newcourt illegally, that is, through a pattern of racketeering, and (3) the existence of a RICO enterprise. McLaughlin's response fails to acknowledge that Newcourt focuses not only on the acquisition issue, but also on the lack of evidence that the interest was acquired or maintained through a pattern of racketeering. McLaughlin has not responded to this contention and has not directed the court to specific record evidence which supports a reasonable inference that Newcourt acquired or maintained an interest in the C-S-N enterprise or, for that matter any other RICO enterprise, through a pattern racketeering. In its response memorandum, McLaughlin repeatedly cites to entire documents to support various assertions regarding Newcourt's alleged control over Durham and Carpenter. ( See Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 26-27.) McLaughlin's Statement of Additional Material Facts does not contain any statements substantiated by specific citation to record evidence to establish that Newcourt obtained or maintained an interest in or control of a RICO enterprise through a pattern or racketeering activity. Furthermore, the nonspecific citation in McLaughlin's response brief to documents in their entirety is insufficient to raise a genuine issue.

In addition, McLaughlin has not offered sufficient evidence to raise a triable issue as to whether it was injured as a proximate cause of Newcourt's alleged acquisition or maintenance of an interest in or control of an enterprise, separate from the injury caused by the predicate acts of racketeering themselves. McLaughlin claims that it was proximately injured by Newcourt's maintenance of an interest in the C-S-N enterprise in that it lost its Carpenter distributorship. It also asserts that it experienced difficulties in getting orders and good prices from Carpenter once it refused to sign up for the Newcourt floor plan. (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 27-28.) These injuries, however, were caused by the alleged racketeering activities of the alleged enterprise (such as alleged threats and coercion) rather than by Newcourt's acquisition or maintenance of an interest or control in the enterprise.

The court finds that McLaughlin has offered insufficient evidence to establish all elements of its § 1962(b) claim. Therefore, Newcourt's motion for summary judgment should be GRANTED with respect to this claim.

McLaughlin also asserts a claim under 18 U.S.C. § 1962(c) which provides:

It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.

To establish a violation of § 1962(c), a plaintiff must prove: "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985) (footnote omitted). A "pattern of racketeering activity" "requires at least two acts of racketeering activity within a ten-year period, 18 U.S.C. § 1961(5), and 'racketeering activity' is defined to include any act indictable under specified provisions of the United States Code[.]" Williams v. Aztar Ind. Gaming Corp., 351 F.3d 294, 298 (7^th Cir. 2003) (citations omitted); see also 18 U.S.C. § 1961(1), (5). Newcourt contends that McLaughlin has insufficient evidence to establish that the predicate acts of extortion, mail fraud, or wire fraud were committed, or that it was injured as the proximate result of those alleged acts.

McLaughlin alleges that Newcourt committed extortion with Carpenter by attempting to coerce McLaughlin through economic means to use the Newcourt floor plan. Newcourt submits that economic coercion does not constitute extortion and that McLaughlin has no evidence that Newcourt used force, violence or fear to coerce Carpenter dealers to use the Newcourt floor plan. "Extortion" is defined as "the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear[.]" 18 U.S.C. § 1951(b)(2). This "fear" includes fear of economic harm or loss. United States v. Granados, 142 F.3d 1016, 1020 (7^th Cir. 1998) (evidence sufficient to support conviction for extortion where defendant intended to obtain victim's money by preying on her fear of economic harm and victim's fear of harm was reasonable); Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 503 (3d Cir. 1998).

McLaughlin states that it feared "the threat of economic harm that could be exacted as it was having a negative effect on business," (Pl.'s Mem. Resp. at 30 (citing Goldsmith Aff., Ex. 1 at 383-90.)) The court's review of the cited deposition testimony, however, reveals that the cited pages do not raise a reasonable inference that McLaughlin actually feared economic harm. And, as asserted by Newcourt, McLaughlin has not included in any of its Rule 56.1 factual assertions a statement that it feared economic harm from Newcourt's or Carpenter's attempts to force it to sign up for the Newcourt floor plan. Furthermore, McLaughlin has not identified specific evidence which raises a reasonable inference that Newcourt intended to obtain money or property from McLaughlin by preying on or exploiting its alleged fear of economic harm. See Granados, 142 F.3d at 1020-21 (requiring proof that the defendant intended to obtain the victim's money by wrongfully preying on her fear of economic harm).

Moreover, McLaughlin's claim of extortion fails because it has not shown that Newcourt's acts amounted to extortion. The Brokerage Concepts decision is instructive. The plaintiff BCI alleged that the defendant HMO extorted a pharmacy's business by conditioning membership in its provider network on the pharmacy's agreement to discontinue a contractual relationship with the plaintiff and use a subsidiary of the defendant as a third party administrator instead. BCI claimed this was extortion through the wrongful use of the fear of economic loss. The defendants argued that the use of this economic fear was not wrongful, but rather, part of hard-bargaining business negotiations. Brokerage Concepts, 140 F.3d at 522. The court concluded that the defendant's conduct did not amount to extortion in violation of the Hobbs Act. The court reasoned that the use of economic fear in business negotiations between private parties is not "inherently" wrongful. Id. at 523. In drawing the line between cases of extortion and cases of hard-bargaining, the court offered on the following distinction:

In a "hard bargaining" scenario the alleged victim has no pre-existing right to pursue his business interests free of the fear he is quelling by receiving value in return for transferring property to the defendant, but in an extortion scenario the alleged victim has a preexisting entitlement to pursue his business interests free of the fear he is quelling by receiving value in return for transferring property to the defendant.

Id. at 525 (quotation omitted). The court said that BCI could prevail on its extortion claim only if the pharmacy had a right to pursue its business interests free of the fear that it would be excluded from the HMO's provider network. Because the pharmacy had no such right (the HMO could have denied access to its network for any reason or no reason), the court concluded that BCI established only hard-bargaining rather than extortion. Brokerage Concepts, 140 F.3d at 526.

Another instructive case is found in George Lussier Enterprises v. Subaru of New England, 286 F. Supp. 2d 86 (D.N.H. 2003). The plaintiff motor vehicle dealers had dealership agreements with the defendant distributor Subaru. The dealers alleged that Subaru misused its power to control the vehicle allocation process in order to coerce the dealers to purchase unwanted accessories, and used other coercive means to induce them to purchase accessories. Id. at 89. The dealers offered evidence that Subaru's district managers conditioned the dealers' access to certain vehicles on their agreement to purchase accessories for other vehicles, sometimes altered computer-based allocations of vehicles to induce them to purchase accessories, refused to fill orders for dealers who had not purchased enough accessories, and told dealers they would suffer in other ways if they failed to purchase accessories. Id. at 92. The dealers alleged that Subaru violated § 1962(c) by extorting them in conditioning access to certain vehicles on their agreement to purchase accessories on those vehicles and on other vehicles. The court concluded that Subaru's practices could not support a RICO extortion claim because they were not coercive. Id. at 93. The court relied on Brokerage Concepts and decided that since the dealers had no pre-existing right to certain vehicles, Subaru's threat to withhold access to such vehicles unless the dealers agreed to purchase accessories did not give rise to the kind of economic fear required for extortion. Id. at 97-98. The court explained that "a manufacturer's offer of incentives to induce compliance ordinarily is not coercive because the dealer has no entitlement to the property that the manufacturer is offering to provide." George Lussier Enterp., 286 F. Supp. 2d at 96.

The undersigned finds the reasoning of Brokerage Concepts and George Lussier Enterprises persuasive. McLaughlin has offered nothing to suggest that it was entitled to continue as a Carpenter dealer beyond the expiration of its distributorship agreement. Nor has it shown any entitlement to any competitive allowance or any particular pricing or delivery term.¹⁹ That dealers who signed up for the Newcourt floor plan were given more favorable CAs and terms than those who did not fails to support a claim of extortion. The offering of incentives and more favorable terms by Carpenter to dealers who did sign up for the floor plan was not economic coercion. Thus, the court concludes that the threats to terminate McLaughlin's distributorship at the expiration of the distributorship agreement, failure to give certain competitive allowances and certain pricing and delivery terms does not create the kind of fear of economic fear necessary to establish extortion.

19 If it had any such entitlements, it has not directed the court to specific record evidence to prove them.

It is also argued by Newcourt that even if McLaughlin could prove extortion, it cannot prove an injury as the proximate result of such extortion because it did not sign up for the Newcourt floor plan financing. A RICO plaintiff must prove more than mere cause-in-fact; the plaintiff must prove proximate cause. Holmes v. Secs. Investor Prot. Corp., 503 U.S. 258, 268-69 (1992) (requiring "some direct relation between the injury asserted and the injurious conduct alleged"); Mendelovitz v. Vosicky, 40 F.3d 182, 184 (7^th Cir. 1994). In response, McLaughlin argues that the Hobbs Act prohibits attempted extortion as well as successful extortion. The cases cited for support, however, see United States v. Bailey, 227 F.3d 792, 797 (7^th Cir. 2000) and United States v. Shields, 999 F.2d 1090, 1098 (7^th Cir. 1993), referred to attempted extortion in the criminal context, not civil. In Holmes, the Supreme Court was clear that a civil plaintiff must prove proximate cause to prevail on a RICO claim. Holmes, 503 U.S. at 228; see also Medelovitz, 40 F.3d at 184. It is undisputed that McLaughlin never signed up for the Newcourt floor plan. Therefore, Newcourt's alleged extortion could not have proximately caused McLaughlin any injury.

McLaughlin also bases its § 1962(c) claim on alleged predicate acts of mail fraud and wire fraud. Newcourt contends that McLaughlin cannot prove mail fraud or wire fraud, or that it was injured as a proximate result of those alleged acts. This is so, Newcourt urges, because under McLaughlin's theory of the case, the statements upon which it relies — that Carpenter dealers had to use the Newcourt financing plan to remain Carpenter dealers and receive their buses under nondiscriminatory terms — were true. On the other hand, it is argued that if the statements giving rise to the mail fraud and wire fraud claims were false, then the RICO claim fails because McLaughlin did not rely on the statements to its detriment and did not sustain injury as a proximate result of the alleged mail or wire fraud, that is, it never signed up for the Newcourt floor plan.

In its response, McLaughlin seems to change its theory of fraud somewhat and argues that the scheme to defraud McLaughlin was the scheme to defraud dealers of their rights and get them to sign up for the Newcourt floor plan. (Pl.'s Mem. Resp. at 33.) The Plaintiff claims that many misrepresentations were made to it. ( Id.)²⁰ More specifically, it is submitted that Carpenter misrepresented that it would deal in good faith with McLaughlin, would terminate McLaughlin only for good cause, and that McLaughlin was getting the best competitive allowances. ( Id. at 32-33.) The Plaintiff has provided specific substantiation for these allegations. ( See Goldsmith Aff., Ex. 38, No. 5 at 25, 26 (good faith and termination for good cause);²¹ Goldsmith Aff., Ex. 1 at 408-10 (stating that Bontrager and Whitesell of Carpenter told McLaughlin that he was getting the best CAs).)²²

20 For evidentiary support, McLaughlin cites to the Goldsmith Affidavit, Exhibits 38 and 39, which are Plaintiff's Answers and Objections to Newcourt Defendant's Second Set of Interrogatories and the Plaintiff's Supplemental Answers to Newcourt Defendants' second Set of Interrogatories Nos. 1, 3, 5 and 12. The former document is over 37 pages in length; the latter is approximately 19 pages in length. The court is not required to, and declines to comb through these voluminous documents in search of the evidentiary substantiation for the Plaintiff's claims absent specific citation by the Plaintiff. Thus, the general citation to these documents in their entirety is insufficient to establish a genuine issue of material fact regarding whether misrepresentations were made to McLaughlin.

21 McLaughlin cited to Exhibit 39, but this appears to be a typographical error.

22 Though Newcourt has not moved for summary judgment on the ground that the alleged misrepresentations about dealing in good faith and termination only for good cause are barred by the applicable statute of limitations, based on the interrogatory answers which support a finding that such representations were made at the latest upon execution of the Distributorship Agreement in 1994 ( see Goldsmith Aff., Ex. 38, No. 5 at 25, 26), it appears that any RICO claim based on these representations as predicate acts would be time barred. See Rotella v. Wood, 528 U.S. 549, 553 (2000) (civil RICO action governed by 4-year statute of limitations); Agency Holding Corp. v. Malley-Duff Assocs., Inc., 483 U.S. 143, 156 (1987). Thus, the statute of limitations bars any claim which accrued before November 22, 1994, and would bar the RICO claim based on these predicate acts.
McLaughlin also claims that Newcourt misrepresented that the floor plan did not have to be used (Pl.'s Mem. Resp. at 32 (citing Goldsmith Aff., Ex. 8), but McLaughlin never established a Newcourt floor plan, so this misrepresentation could not have proximately caused any injury to McLaughlin.

In reply, Newcourt contends that McLaughlin cannot demonstrate a sufficient causal connection between the alleged misrepresentations identified in its response brief and the injuries it claims to have sustained. An inability to show proximate cause dooms a plaintiff's RICO claim based on an alleged predicate act of mail fraud or wire fraud. See Holmes, 503 U.S. at 268-69 (1992) (requiring "some direct relation between the injury asserted and the injurious conduct alleged"); Mendelovitz, 40 F.3d at 184; see also Moore v. PaineWebber, Inc., 189 F.3d 165, 169-70 (2^nd Cir. 1999). The court concludes that McLaughlin has not shown that the alleged misrepresentations upon which it relies in asserting predicate acts of mail fraud and wire fraud were the proximate cause of any discriminatory treatment or its ultimate termination as a Carpenter dealer.

McLaughlin submits that it relied on the alleged misrepresentation regarding competitive allowances in continuing as a Carpenter distributor and was harmed in the form of higher prices. (Pl.'s Surreply Defs.' Mot. Summ. J. at 24.) McLaughlin cites the Goldsmith Affidavit, Exhibits 1 at 193, 408-10, Exhibits 5, 6 and Exhibit 38 at 5-28, as evidentiary support. Exhibits 5 and 6 do not even mention competitive allowances and the nonspecific citation to the 23 pages of Exhibit 38 is insufficient to raise a genuine issue. Exhibit 1, the deposition testimony of Tim McLaughlin, creates an issue as to whether Carpenter represented to McLaughlin that it was getting the best competitive allowances. However, McLaughlin has not pointed to any evidence in the record to substantiate its claim to have relied on the alleged misrepresentation regarding competitive allowances in continuing as a Carpenter distributor. Even assuming that the alleged misrepresentation was made, as explained below, this is not enough to establish mail or wire fraud as a predicate act.

In Moore, the plaintiffs claimed that the defendant disguised a life insurance policy as an investment package, thus tricking them into buying the life insurance with funds that they would have otherwise used for other investments. The plaintiffs sued, alleging RICO violations and fraud. The district court dismissed the complaint and the plaintiffs appealed. Moore, 189 F.3d at 167. On appeal, the Second Circuit addressed the causation requirement needed to establish a defendant's RICO liability. The court stated that the causation requirement has two separate components. The first is "'transaction causation,' meaning that the misrepresentation must have led the plaintiffs to enter into the transactions at issue[.]" Id. at 169-70. The second component is "'loss causation,' meaning that the misrepresentation must be both an actual and a proximate source of the loss that the plaintiffs suffered." Id. at 170. The court then explained:

To show transaction causation, the plaintiffs must demonstrate that but for the defendant's wrongful acts, the plaintiffs would not have entered into the transactions that resulted in their losses. To show loss causation, the plaintiffs must show that the defendants' misstatements or omissions were 'the reason the transactions turned out to be . . . losing ones.'

Moore, 189 F.3d at 172 (quotations omitted). The court concluded that the complaint sufficiently pled loss causation, noting that the plaintiffs alleged that the defendant's representations were made in order to induce them to buy the life insurance and that they would not have invested their money in the life insurance but for those representations. Moore, 189 F.3d at 172.

Newcourt contends that McLaughlin has not shown a sufficient causal connection between the alleged misrepresentations regarding competitive allowances and its claimed injuries, specifically that McLaughlin cannot show loss causation. On review of the record, though, the court finds insufficient evidence to show transaction causation. McLaughlin asserts that it relied on the alleged misrepresentations, including those regarding competitive allowances, but it has not directed the court to the evidence to raise a reasonable inference that but for the alleged misrepresentations, it would not have remained a Carpenter distributor. The inability to raise an inference of transaction causation leaves McLaughlin unable to establish Newcourt's liability under RICO for the alleged predicate acts of mail fraud or wire fraud. Moreover, with the possible exception of the representations that McLaughlin was receiving the best competitive allowances, McLaughlin has not shown loss causation, that is, that the representations were the proximate cause of its alleged injuries. This is another reason why McLaughlin cannot establish Newcourt's liability for the alleged predicate acts of mail fraud and wire fraud.

The court finds that McLaughlin has insufficient evidence to establish that the alleged misrepresentations upon which it bases its allegations of mail fraud and wire fraud were the proximate cause of its claimed injuries. Therefore, Newcourt is entitled to and will be GRANTED summary judgment on the § 1962(c) claim.

Another basis for granting summary judgment to Newcourt on this claim as well as all other RICO claims is McLaughlin's inability to establish the existence of a RICO enterprise. According to Newcourt, McLaughlin cannot establish that the C-S-N enterprise satisfies the requirements of a RICO "enterprise".

Newcourt contends that the fact that Newcourt and Carpenter entered into the June 1994 Operating Agreement and other related agreements is insufficient as a matter of law to raise an inference that Newcourt and Carpenter comprised a RICO enterprise. United States v. Neapolitan, 791 F.2d 489 (7^th Cir. 1986), cited as support, recognizes that a conspiracy and RICO enterprise are not synonymous and states that "the central element of an enterprise is structure. An enterprise must be more than a group of people who get together to commit a 'pattern of racketeering activity.'" Id. at 500. Thus, proof of a conspiracy is not necessarily sufficient to raise a reasonable inference of a RICO enterprise. See, e.g., Jennings v. Emry, 910 F.2d 1434, 1441 (7^th Cir. 1990); Neapolitan, 791 F.2d at 500. Both Neopolitan and subsequent Seventh Circuit cases emphasize that a RICO enterprise must have an "ascertainable structure." See, e.g., Jennings, 910 F.2d at 1441; Neapolitan, 791 F.3d at 500. Thus, the court concludes that the mere existence of the Operating Agreement and related agreements are insufficient to establish a RICO enterprise.

The Seventh Circuit has stated that "'an enterprise is defined by what it is, not what it does.'" Slaney v. The Int'l Amateur Athletic Fed'n, 244 F.3d 580, 600 n. 11 (7^th Cir. 20001) (quoting Jennings, 910 F.2d at 1440). The RICO definition of "enterprise" includes "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity," 18 U.S.C. § 1961(4), both legitimate and illegitimate, formal and informal organizations, see United States v. Turkette, 452 U.S. 576, 587 (1981). In rejecting the argument that an indictment failed to allege a RICO enterprise and pattern of racketeering activity, the Seventh Circuit said that a RICO enterprise "must be an organization with a structure and goals separate from the predicate acts themselves" [and] "is an ongoing structure of persons associated through time, joined in purpose, and organized in a manner amenable to hierarchical or consensual decision-making." United States v. Torres, 191 F.3d 799, 805 (7^th Cir. 1999) (quotations omitted). "The continuity of an informal enterprise and the differentiation among roles can provide the requisite 'structure' to prove the elements of 'enterprise.'" Id. at 806 (quotation omitted).

Newcourt maintains that McLaughlin has not produced any evidence to show that the alleged C-S-N enterprise had an ascertainable structure. In particular, it claims that the evidence demonstrates only that various Carpenter, Newcourt and SerVaas principals or employees held certain positions and performed certain functions within the respective corporations. Thus, Newcourt urges that Richmond v. Nationwide Cassel L.P., 52 F.3d 640, 645-46 (7^th Cir. 1995) (affirming dismissal of RICO claim for failure to sufficiently allege RICO enterprise where the complaint alleged "only that the defendants perpetrating the fraud . . . were conducting their own (and each other's) affairs), results in the conclusion that McLaughlin has not shown a RICO enterprise.

Newcourt's contention that McLaughlin has offered insufficient evidence to establish an ascertainable structure of an alleged RICO enterprise is well-taken. McLaughlin submits that continuity is established by the evidence of the Operating Agreement in June 1994, the subsequent amendment thereto, the inventory and financing agreements between Carpenter and Newcourt, the fact that the Operating Agreement was for a five-year term, and the existence of another Operating Agreement between Newcourt and Carpenter in January 1996. (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 35.) McLaughlin also claims to have evidence of role differentiation, namely that Cochran and Durham were given positions at the same time Carpenter and Newcourt entered into the Operating Agreement, with their positions tied to the implementation of the loan program. McLaughlin asserts that Durham and Cochran had different roles, responsibilities and positions. ( Id. at 36.)

The evidence shows that Durham became the Chairman of Carpenter Financial and Cochran because the President of Carpenter Financial.²³ McLaughlin points to evidence to demonstrate their responsibilities in those positions as officers of Carpenter Financial. It does not, however, point to evidence to establish their responsibilities or roles as part of an enterprise.²⁴ And, McLaughlin has not alleged that Carpenter Financial, Carpenter or Newcourt was a sham corporation. McLaughlin's evidence establishes only that Durham and Cochran were performing their responsibilities as officers of Carpenter Financial; the record does not raise a reasonable inference that they were performing differentiated roles for any RICO enterprise. Therefore, the court concludes that is insufficient for a trier of fact to find that McLaughlin has proven a RICO enterprise with an ascertainable structure. See Richmond, 52 F.3d at 645-46. Newcourt's motion for summary judgment therefore will be GRANTED on the § 1962(c) claim and on all other RICO claims as well.

23 It was contemplated that Cochran and Durham would be employees of a new company, Newco, but Newco was never formed.

24 McLaughlin argues that Hodgson had a clear role (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 36), but does not direct the court to any evidence to establish what that role was. Thus, this conclusory assertion fails to create a genuine issue.

Lastly, McLaughlin alleges that Newcourt violated § 1962(d), which makes it "unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of [§ 1962]." 18 U.S.C. § 1962(d). "[T]he touchstone of liability under § 1962(d) is an agreement to participate in an endeavor which, if completed, would constitute a violation of the substantive statute." Slaney v. The Int'l Amateur Athletic Fed'n, 244 F.3d 580, 600 (7^th Cir. 2001). Thus, to establish a RICO conspiracy claim under § 1962(d), a plaintiff must show that: "(1) the defendant agreed to maintain an interest in or control of an enterprise or to participate in the affairs of an enterprise through a pattern of racketeering activity, and (2) the defendant further agreed that someone would commit at least two predicate acts to accomplish those goals." Id. (citation omitted); see also Brouwer v. Raffensperger, Hughes Co., 199 F.3d 961, 965 (7^th Cir. 2000). The second element requires proof of an agreement to violate the substantive provisions of § 1962. See Beck v. Prupris, 529 U.S. 494, 507 n. 1 (2000); Brouwer, 199 F.3d at 965.

Newcourt seeks summary judgment on the § 1962(d) claim on the grounds that: (1) McLaughlin cannot show an enterprise; and (2) McLaughlin cannot establish that Newcourt agreed that someone would commit at least two predicate acts to accomplish the conspiracy's goals.

Newcourt contends that to show a conspiracy to violate § 1962(a), McLaughlin must show that Newcourt agreed with someone to use the proceeds from a pattern of racketeering activity to acquire an interest in a RICO enterprise. In response, McLaughlin argues that the Operating Agreement and press release establish an agreement, the communications between Newcourt and Carpenter establish the contemplated predicate acts, and the facts show an agreement to derive income from the pattern of racketeering and "show this income benefited (sic) Newcourt." (Pl.'s Mem. Resp. at 39-40 (citing Goldsmith Aff., Ex. 2 Ex. 17 at N24927-N25011).) This is an insufficient showing; McLaughlin must offer evidence to raise an inference that Newcourt agreed with someone to use or invest income derived from a pattern of racketeering activity, or the proceeds of such income, in a RICO enterprise. See 18 U.S.C. § 1962(a); Titan Int'l, Inc. v. Becker, 189 F. Supp. 2d 817, 828 (C.D. Ill. 2001) ("to properly allege a conspiracy to violate § 1962(a), Plaintiffs must allege that Defendants have agreed that income received through racketeering activities would be used or invested in the acquisition or establishment of an enterprise that affected interstate commerce").

McLaughlin has not pointed to any evidence which creates a genuine issue of fact that Newcourt agreed with Carpenter, SerVaas or anyone else that income from racketeering activities would be used or invested in the alleged Newcourt enterprise. The two exhibits cited (Exhibit 2 is a copy of a memorandum from Dave Hodgson of Newcourt to Tim Durham dated January 11, 1996, regarding the status of wholesale applications of Carpenter dealers and Exhibit 17 consists of copies of invoice statements sent to Carpenter from Newcourt and other financial statements) do not substantiate the contemplation of predicate acts or an agreement to derive income from the pattern of racketeering in any event. And, McLaughlin has not included such factual assertions in a Rule 56.1 Statement, as it is required to do under the Local Rules.

Newcourt next argues that to establish a conspiracy to violate § 1962(b), McLaughlin must show that Newcourt agreed that someone would acquire an interest in a RICO enterprise by illegal means. To prevail on its claim of conspiracy to violate § 1962(b), McLaughlin must show that: (1) Newcourt agreed to acquire or maintain an interest in or control of an enterprise or to conduct or participate in the affairs of an enterprise through a pattern of racketeering activity; and (2) Newcourt further agreed that someone would commit at least two predicate acts to accomplish those goals. See Gagan v. Am. Cablevision, Inc., 77 F.3d 951, 961 (7^th Cir. 1996).

According to Newcourt, McLaughlin's evidence fails to raise an inference of an agreement to acquire such an interest in or control of an enterprise illegally, that is, through a pattern of racketeering activity. McLaughlin answers that its evidence, including the Operating Agreement and the provision of positions with Newcourt to Durham and Cochran after the agreement was signed, shows an agreement that someone would acquire or maintain an interest or control in a RICO enterprise. (Pl.'s Mem. Resp. at 40.) And, according to McLaughlin, the pattern of communications between Newcourt and Carpenter and between Newcourt and Carpenter distributors demonstrate "that the agreement also contemplated racketeering activity." ( Id.) (emphasis added). But it is not enough to show an agreement to engage in racketeering activity. It must be shown, with evidence, that there was an agreement to acquire or maintain an interest or control in a RICO enterprise by illegal means, that is, through a pattern of racketeering activity. McLaughlin has not offered evidence to establish this, and does not even argue that it has done so.

As for the claim of a conspiracy to violate § 1962(c), it is argued that McLaughlin must show that Newcourt agreed that someone would commit at least two predicate acts of racketeering in conducting the affairs of a RICO enterprise. A conspiracy to violate RICO consists of two agreements: "an agreement to conduct or participate in the affairs of an enterprise and an agreement to the commission of at least two predicate acts." United States v. Neapolitan, 791 F.2d 489 (7^th Cir. 1986); see also Brouwer v. Raffensperger, Hughes Co., 199 F.3d 961, 966 (7^th Cir. 2000) ("a defendant may conspire to violate subsection (c) if he agreed to conduct or participate in the affairs of an enterprise through a pattern of racketeering activity.") (quotation omitted). With respect to a claim of a conspiracy to violate § 1962(c), the Seventh Circuit has clarified the level of participation required for the agreement to conduct or participate in the affairs of an enterprise:

one's agreement must be to knowingly facilitate the activities of the operators or managers to whom subsection (c) applies. One must knowingly agree to perform services of a kind which facilitate the activities of those who are operating the enterprise in an illegal manner. It is an agreement, not to operate or manage the enterprise, but personally to facilitate the activities of those who do.

Brouwer, 199 F.3d at 967.

Newcourt submits that McLaughlin's evidence is insufficient to show that Newcourt entered into an agreement to conduct or participate in the affairs of an enterprise, as clarified by Brouwer, or entered into an agreement to the commission of at least two predicate acts. McLaughlin argues that the evidence shows the extortionate attempts and use of mails and wires aimed at getting dealers on the Newcourt floor plan, which raises an inference of an agreement to further the activities of the enterprise through predicate acts and that Newcourt agreed to join the enterprise. (Pl.'s Mem. Resp. at 41.) The Plaintiff also argues that the Operating Agreement and press release are direct evidence of Newcourt's agreement to join the enterprise. McLaughlin submits that the alleged secrecy of Durham's employment, and Durhams' sending of draft letters to Mike Imrie at Newcourt for editing also raise an inference of a conspiracy under § 1692(d). ( Id. at 41-42.)

McLaughlin's evidence is insufficient to raise a triable issue as to whether Newcourt entered into either of the two agreements required to prove a conspiracy to violate § 1962(c). The inferences which McLaughlin seeks to draw are not supported by the evidence. McLaughlin's evidence fails to raise a reasonable inference that Newcourt agreed to perform services of a kind which facilitate the activities of those operating the enterprise in an illegal manner or that Newcourt agreed to the commission of at least two predicate acts. Thus, summary judgment will be GRANTED Newcourt on McLaughlin's § 1962(d) claim that Newcourt conspired to violate § 1962(c).

C. CHOICE OF LAW STATUTES OF LIMITATION

Because this action was transferred to this court, a determination must be made whether to apply the choice of law rules of the forum state, Indiana, or the transferor state, Minnesota. As a general rule when a case is transferred, the transferee court must apply the choice of law rules of the transferor court. Ferens v. John Deere Co., 494 U.S. 516, 523 (1990); Doering ex rel. Barrett v. Copper Mountain, Inc., 259 F.3d 1202, 1209 (10th Cir. 2001). However, when as here, a case is transferred because the transferor court lacks personal jurisdiction, the transferee court applies the choice of law rules of the forum state. See id.; Muldoon v. Tropitone Furn. Co., 1 F.3d 964, 967 (9^th Cir. 1993).

Under Indiana law, "for purposes of choice of law[,] statutes of limitations are treated as procedural rules." Singletary v. Cont'l Ill. Nat'l Bank Trust Co., 9 F.3d 1236, 1242 (7^th Cir. 1993); see also Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg Feldman Fine Arts, Inc., 717 F. Supp. 1374, 1385 (S.D. Ind. 1989) ("Because in Indiana statutes of limitations are procedural in nature, Indiana choice-of-law rules state that the statute of limitations of the forum state, Indiana, will apply.") (citations omitted), aff'd, 917 F.2d 278 (7^th Cir. 1990); but see Jean v. Dugan, 20 F.3d 255, 260 (7^th Cir. 1994) (treating statute of limitations as substantive for choice of law purposes).

McLaughlin argues that the court should apply the statute of limitations of the state with the closest connection to the claim at issue, which it suggests is a modern trend in the law. Even if this is the trend, this federal court cannot change the choice of law rules of the forum state. See Sun Oil Co. v. Wortman, 486 U.S. 717, 728-29 (1988) ("If current conditions render it desirable that forum States no longer treat a particular issue as procedural for conflict of laws purposes, those States can themselves adopt a rule to that effect"). Instead, this court must apply the forum state's choice of law rules, even though at times in the past the Seventh Circuit seems to have applied a "significant relationship" test in determining which state's statutes of limitations was applicable. See Jean, 20 F.3d at 260 (treating statute of limitations as substantive for choice of law purposes); Gianni v. Fort Wayne Air Serv., Inc., 342 F.2d 621 (7^th Cir. 1965) (applying statute of limitations of forum state). Dart Industries, Inc. v. Adell, 517 F. Supp. 9 (S.D. Ind. 1980), does not hold that the court should apply the statute of limitations of the state with the most intimate contacts to the transaction at issue. Rather, it follows the well-established rule that the statute of limitations is a procedural matter under Indiana law and a federal court sitting in diversity therefore should apply Indiana's limitations. Id. at 10-11.

The court concludes that it must apply Indiana's choice of law rules including its statute of limitations to McLaughlin's state law claims, even though another state's substantive law governs those claims. See Sun Oil, 486 U.S. at 722.²⁵ To the extent McLaughlin suggests that the court should apply the statute of limitations of a different state because the substantive law governing its claims are supplied by that state, it is simply incorrect. ( See Pl.'s Surreply Defs.' Mot. Summ. J. at 28 n. 41.)

25 An exception to this rule exists where the cause of action is created by statute and the statute includes a time within which the cause of action must be asserted. See Horvath v. Davidson, 264 N.E.2d 328, 334 (Ind.Ct.App. 1970). That is not the situation with regard to any of the Plaintiff's statutory claims with the exception of the claims under the Minnesota Franchise Act, which contains a three year limitations period. Minn. Stat. Ann. § 80C.17 subd., 5.

McLaughlin argues that a different choice of law analysis applies if its claims are best characterized as tort claims rather than contract claims. McLaughlin is incorrect, and the case upon it relies, Castelli v. Steele, 700 F. Supp. 449 (S.D. Ind. 1988), says no such thing. Castelli addressed Indiana's choice of law analysis in determining the applicable state substantive law. Id. at 451-52. It did not address which state's statute of limitations applied. Therefore, the court will consider Indiana statutes of limitations when deciding whether any of McLaughlin's state law claims are time barred.

D. COUNT IV: FRAUD MISREPRESENTATION

Regarding McLaughlin's claim of fraud and misrepresentation in Count IV, the Defendants contend that they are entitled to summary judgment on the grounds that: (1) alleged fraudulent statements that dealers would be discriminated against or terminated if they failed to use the Newcourt floor plan financing do not constitute fraud because, according to McLaughlin's theory, such statements were true; (2) alleged statements that Carpenter or Newcourt was legally entitled to discriminate against or terminate dealers who did not sign up for the floor plan do not constitute fraud because McLaughlin did not detrimentally rely on such statements; (3) these alleged statements were representations of law which are not actionable as fraud; and (4) alleged statements "ratified" by Newcourt which resulted in the loss of McLaughlin's exclusive sales territory in the prime Minnesota market are barred by the statute of limitations.

It is necessary for the court to decide what state's substantive law should be applied to the fraud claims, as the applicable law may make a difference in this case. The parties have not directly confronted this issue. McLaughlin cites to both Indiana and Minnesota law. Newcourt raises the issue, but then asserts that there appears to be no relevant conflict between the laws of North Dakota and Indiana. It appears to be wrong in that regard, however.

Under Indiana's choice of law analysis, the court applies a two-step rule in determining what substantive law applies. Hubbard Mfg. Co. v. Greeson, 515 N.E.2d 1071, 1073-74 (Ind. 1987); see also In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1016 (7^th Cir. 2002) ("Indiana is a lex loci delicti state: in all but exceptional cases it applies the law of the place where harm occurred.") (citing Hubbard), cert. denied sub nom. Gustafson v. Bridgestone/Firestone, Inc., 537 U.S. 1105 (2003). The court first must determine whether the place where the last event necessary to make the defendant liable for the alleged tort, that is, the place of the injury, is insignificant. Hubbard, 515 N.E.2d at 1074; see also Land v. Yamaha Motor Corp., 272 F.3d 514, 516 (7^th Cir. 2001). If it is not insignificant, then the law of that state applies. Hubbard, 515 N.E.2d at 1073. If the place of the injury is insignificant, however, then the court must consider other factors such as: "1) the place where the conduct causing the injury occurred; 2) the residence or place of business of the parties; and 3) the place where the relationship is centered." Id. at 1073-74; see also Land, 272 F.3d at 517. In this case, the place of the injury — North Dakota (McLaughlin is a North Dakota corporation with its principal place of business in that state) is not insignificant. Therefore, the court concludes that North Dakota law applies. Consequently, the court need not proceed to the second step of the choice-of-law analysis. See Land, 272 F.3d at 517.²⁶

26 But even if the court considered these other factors, it would reach the same conclusion.

North Dakota law distinguishes between the tort of fraud and the tort of deceit. A fraud is limited to misrepresentations between parties to a contract; deceit applies to misrepresentations where there is no contract. Olson v. Fraase, 421 N.W.2d 820, 827 n. 3 (N.D. 1988). Thus, under North Dakota law, the cause of action asserted in Count IV would be one for deceit as there was no contract between McLaughlin and Newcourt, and so the court refers to McLaughlin's claim for deceit rather than fraud.

Many of the statements upon which McLaughlin bases its deceit claim fail to support its claim because, according to McLaughlin, the statements were true rather than false. To prevail on a deceit claim under North Dakota law, McLaughlin must establish that Newcourt made a false representation of fact. See Delzer v. United Bank of Bismarck, 527 N.W.2d 650, 654 n. 1 (N.D. 1995); N.D. Cent. Code § 9-10-02.²⁷ Any alleged representation by Carpenter or Newcourt that dealers would be discriminated against or terminated if they did not use the Newcourt floor plan cannot support a deceit claim under North Dakota law as McLaughlin alleges that dealers who did not use the floor plan were discriminated against; thus, such representations were not false. This includes alleged representations that in order to do business with Carpenter, to obtain competitive allowances, to order and receive delivery of buses, and to obtain other nondiscriminatory terms and conditions including pricing, McLaughlin was required to finance the production of buses for Carpenter and to floor plan the buses through Newcourt and Carpenter Acceptance Corporation.

27 The same is true in order to prevail on a fraud claim under Indiana law. See Rice v. Strunk, 670 N.E.2d 1280, 1289 (Ind. 1996).

To the extent McLaughlin bases its deceit claim on alleged fraudulent statements upon which it did not rely to its detriment, Newcourt is entitled to summary judgment on the claim under North Dakota because the plaintiff's justifiable reliance is an element of deceit. See Delzer, 527 N.W.2d at 654 n. 1.²⁸ This encompasses many of the alleged statements upon which McLaughlin relies and includes assertions that Carpenter or Newcourt were legally entitled to: discriminate against or terminate dealers who did not sign up for the Newcourt floor plan, refuse to process those dealers' orders and discriminate in the granting of competitive allowances. It is undisputed that McLaughlin did not sign up for the floor plan.²⁹

28 Again, the same result would obtain under Indiana law. See Rice, 670 N.E.2d at 1289 (reliance is an element of fraud).

29 Because McLaughlin cannot show reliance on such representations, the court need not address the argument that such representations cannot support an actionable deceit claim because they were representations of law.

Moreover, much of McLaughlin's deceit claim is time barred. As discussed previously, Indiana's statute of limitations are procedural and therefore applicable to McLaughlin's state law claims even though those claims may be controlled by North Dakota substantive law. Thus, the court applies Indiana's statute of limitations for fraud claims to McLaughlin's claim of deceit. Indiana's statute of limitations for a fraud claim is six years. Ind. Code § 34-11-2-7(4). A six-year limitations period bars any fraud claim which accrued before November 22, 1992.³⁰ Therefore, a deceit claim based on any of the alleged fraudulent statements or misrepresentations of Newcourt made before November 22, 1992, is time barred.³¹ This necessarily includes any alleged statements or misrepresentations which resulted in or caused the termination of McLaughlin's dealership in the prime Minnesota market, which termination occurred no later than August 26, 1992.

30 See note 6 supra.

31 A fraud claim under Indiana law also would be barred.

McLaughlin is correct that its deceit claim is based on other alleged representations not specifically mentioned by Newcourt in its moving papers. ( See Goldsmith Aff., Ex. 38, Pl.'s Answers Obj. Newcourt Defs.' Second Set of Interrogs. No. 5, ¶¶ 13, 14[a],³² 14[b], and 15-24; Goldsmith Aff., Ex. 39, Pl.'s Suppl. Answers Newcourt Defs.' Second Set of Interrogs. Nos. 1, 3, 5 and 12.)³³ However, the bases advanced by Newcourt in seeking summary judgment on the deceit claim apply to these other alleged representations as well. It bears emphasis that Newcourt seeks summary judgment on the deceit claim in its entirety; it does not seek summary judgment only as to specific statements.

32 There are two paragraph 14s in the Second Set of Interrogatories. For clarity, the court will refer to them as 14[a] and 14[b].

33 Newcourt replies that McLaughlin has changed the theory upon which its deceit claim is based. The theory now at the centerpiece of McLaughlin's deceit claim can be gleaned from the Amended Complaint, though it seems that there has been a shift in McLaughlin's emphasis on these alleged misrepresentations.

The Plaintiff's discovery responses include assertions of representations by Carpenter relating to, in Newcourt's terms, "the good things that would happen [to McLaughlin] if it remained a Carpenter dealer" (Newcourt's Reply at 45), for example, that McLaughlin would continue to be the exclusive Carpenter dealer in certain areas, that it would be dealt with fairly and in good faith, and that it would not be terminated except for good cause. (Pl.'s Answers Newcourt Defs.' Interrog. No. 5 ¶¶ 13, 18, 19; Pl.'s Suppl. Answers Newcourt Defs.' Interrog. No. 5 at 10-11; Goldsmith Aff., Ex. 1, McLaughlin Dep. 11/29/00 at 165-66 (testifying to oral agreements between McLaughlin and Carpenter that Carpenter would deal in good faith, McLaughlin's territory would remain exclusive, Carpenter would supply parts, pay warranty bills, provide a product in a timely manner, and the products would be in compliance with regulation specifications; see also id. at 193 (testifying that Bontrager and Whitesell of Carpenter told McLaughlin from 1991 through the end of their business relationship that McLaughlin was getting the best competitive allowances from Carpenter); see also Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 66-67 (referring to representations by Carpenter where the alleged representations are preceded by "Carpenter consistently represented" or "Carpenter represented . . . ").) It is unclear, however, how Newcourt may be held liable for these representations made by Carpenter.

McLaughlin alleged that Newcourt ratified these statements, but fails to offer any legal authority to establish that Newcourt may be held liable based on its alleged ratification. Even assuming that Newcourt could be held liable for merely ratifying such statements, the deceit claim based on these statements would fail because McLaughlin has not pointed to any evidence to create a genuine issue that Newcourt, did in fact, ratify these statements by Carpenter. Instead, McLaughlin seems to be attempting to make a deceit claim out of the combination of representations made by Carpenter and the alleged extortion of McLaughlin by both Carpenter and Newcourt. McLaughlin, however, offers absolutely no legal authority to support its novel theory that the combination of misrepresentations by one defendant and alleged extortion by that defendant and a second defendant can support an actionable deceit claim under North Dakota law (or for that matter a fraud claim under any substantive law) against the second defendant. The court is unaware of any authority for such a creative proposition.

Also with regard to Newcourt's liability for Carpenter's alleged promises about the good things that would happen to McLaughlin if it remained a Carpenter dealer, the Defendants argue that while such promises may have caused McLaughlin to remain a Carpenter dealer, the promises were not the proximate cause of McLaughlin's alleged injuries. (Def.'s Reply Supp. Mot. Summ. J. at 47.) Though this argument was made for the first time on reply, the Plaintiff has had a sufficient opportunity to fully respond to this motion as it filed a surreply. Newcourt is correct that McLaughlin has not shown that these representations were the proximate cause of McLaughlin's alleged injuries.

Finally, the court notes that McLaughlin has offered evidence that Newcourt on January 10, 1996, sent a purported statement of account to McLaughlin listing fees and payments due on a Newcourt floor plan, which did not exist. (Pl.'s Suppl. Answer Interrog. No. 5, Goldsmith Aff., Ex. 39 at 14.) This statement, however, could not support a deceit action because McLaughlin has not offered any evidence that it relied on this statement — there is no suggestion that McLaughlin paid the fees and payments listed on the erroneous statement of account. See Delzer, 527 N.W.2d at 654 n. 1.

For all these reasons, Newcourt is entitled to summary judgment on the deceit claim. Therefore, the summary judgment motion is GRANTED as to the deceit claim, which is referred to by the parties as the fraud/misrepresentation claim.

E. COUNT V: STATE DEALER FRANCHISE LAWS

1. Statute of Limitations Bar

McLaughlin brings claims under a variety of state motor vehicle dealer and franchise laws.³⁴ Newcourt contends that all of these, with the exception of the claim under the Minnesota Franchise Act, are time barred. McLaughlin argues otherwise. With the single exception noted above, none of the dealer or franchise statutes under which McLaughlin brings claims contains a time within a cause of action under such a statute must be asserted. Therefore, the court looks to the Indiana statutes of limitations in determining whether the claims are time barred.

34 The only such laws expressly identified in the Amended Complaint are the Minnesota Franchise Act and the Minnesota Motor Vehicle Sale and Distribution Act, §§ 80E and 80C. However, the Plaintiff's Answers and Supplemental Answers to First Interrogatories indicate that claims are asserted under various provisions of the Montana Sales and Distribution of Motor Vehicles Act, a "miscellaneous" North Dakota statutory provision, and various provisions under the South Dakota Vehicle Dealers Act.

It is argued by Newcourt that the applicable statute of limitations is the limitations for deceptive franchise practices, injury to personal property, or for a statutory penalty. See Ind. Code § 23-2-2.7-7 (deceptive franchise practices), § 34-11-2-4(2) (injury to personal property), § 34-11-2-4(3) (statutory penalty). All of these provide for a two-year limitations period. Id. If a two-year statute of limitations period applies to McLaughlin's claims under the various franchise and dealer laws, then any claims which accrued prior to November 22, 1996, would be time barred.

Newcourt maintains that all claims under the state dealer and franchise statutes relate to injuries McLaughlin allegedly incurred while a Carpenter dealer, or because of the alleged "constructive termination" of McLaughlin as a Carpenter dealer. McLaughlin alleged the "constructive termination" in its complaint filed on July 25, 1996, in the United States District Court for the District of Minnesota. (Newcourt's App. Evid. Materials, vol. II, Ex. 43 ¶ 74.) Thus, the alleged "constructive termination" had to have occurred before November 22, 1996. As a result, Newcourt contends that the claims under the dealer and franchise statutes are time barred. McLaughlin responds that the statute of limitations relied on by Newcourt are inapplicable, and its state law claims are best characterized as claims for breach of an unwritten contract or action for relief against fraud so that the six-year limitations applies. See Ind. Code § 34-11-2-7(1) (unwritten contract), (4) (fraud).

If McLaughlin's claims under the state dealer and franchise laws should be characterized as tort claims, then they are barred by the two-year statute of limitations for injuries to personal property. If, however, these claims should be characterized as contract claims, then the six-year statute of limitations applies, and the claims are timely. Under Indiana law, "'the applicable statute of limitations is ascertained by identifying the nature or substance of the cause of action.'" Schuman v. Kobets, 716 N.E.2d 355, 356 (Ind. 1999) (quoting Whitehouse v. Quinn, 477 N.E.2d 270, 274 (Ind. 1985)); see also Lewis v. Methodist Hosp., Inc., 326 F.3d 851, 853 (7^th Cir. 2003); INS Investig. Bureau, Inc. v. Lee, 709 N.E.2d 736, 743 (Ind.Ct.App. 1999), trans. denied. McLaughlin argues that under the dealer statutes it has alleged that Carpenter and Newcourt terminated a dealership agreement without good cause, failed to act fairly and in good faith and fraudulently concealed violations of the statutes ( see Am. Compl. ¶ 95), allegations which it maintains are more analogous to a breach of contract claim than a tort claim.

All of the cases upon which McLaughlin relies in asserting that the longer limitations period applies, however, arise in the context of a contract. In Wells v. Stone City Bank, 691 N.E.2d 1246 (Ind.Ct.App. 1998), a bank customer sued his bank alleging loss of personal and business reputation, and loss of business income because of the bank's failure to honor checks drawn on his account with the bank. The court said that the damages the plaintiff alleged were premised on a breach of contract theory and arose out of his contractual relationship with the bank. Id. at 1249. The plaintiff mortgagee's claims against the defendant title company in Lawyers Title Insurance Corp. v. Pokraka, 595 N.E.2d 244 (Ind. 1992), arose out of the parties' oral agreement that the title company would follow the customs of title companies. Id. at 248. In Whitehouse, a client brought a legal malpractice action against his former attorney.³⁵ Though the parties had a written contract, the court held that the two-year statute of limitations for injuries to personal property applied. Whitehouse, 477 N.E.2d at 274. In Lee, the assignees' cause of action arose from a business relationship and oral contract and the assignees alleged breach of contract and negligent performance. 709 N.E.2d at 741; see also Lewis, 326 F.3d at 854 (applying statute of limitations for contract actions where "the core of Lewis's action against Methodist Hospital states a claim for breach of contract"). McLaughlin cites no case in which a court applied the statute of limitations governing unwritten contracts where the parties had no contract or oral agreement.

35 The Indiana Supreme Court subsequently limited Whitehouse to legal malpractice actions. See Pokraka, 595 N.E.2d at 247; see also Lewis, 326 F.3d at 855 (explaining that Whitehouse is based "implicitly on the proposition that where one party to a contract owes a fiduciary duty to the other party, a breach of that duty necessarily gives rise to an action in tort because it is impossible to contract around fiduciary obligations").

The case of Northview Motors, Inc. v. Chrysler Motors Corp., 227 F.3d 78 (3^d Cir. 2000), is instructive because the court addressed a similar issue. Northview, an automobile dealership, sued Chrysler alleging that it breached a sales and service contract and violated laws including the Pennsylvania Board of Vehicles Act ("BVA"), Pa. Stat. Ann. tit. 63, §§ 818.1 et seq. The district court granted summary judgment to Chrysler on the BVA claims on the ground that they were barred by the statute of limitations. The Third Circuit decided that the Pennsylvania two-year statute of limitations for any action or proceeding "to recover damages for injury to person or property which is founded on negligent, intentional, or otherwise tortious conduct," see Pa. Stat. Ann. tit. 42, § 5524(7), governed the claims under the BVA. Northview, 227 F.3d at 90. The court reasoned in part that Northview argued Chrysler violated the BVA with its intentional or tortious conduct, namely, by coercive tactics which were used to force it out of business and the discriminatory manner in which it was treated. Id. at 91.

Cases cited by McLaughlin to support its view that a non-tort statute of limitations is applicable are inapposite. For example, in Salem Mall Lincoln Mercury, Inc. v. Hyundai Motor America, 103 F. Supp. 2d 1032 (S.D. Ohio 2000), the court applied the statute of limitations for actions where liability was created by statute. Indiana does not have a comparable statute of limitations. In addition, the plaintiff and defendant in that case had a written dealership agreement. Custom Communications Engineering, Inc. v. E.F. Johnson Co., 636 A.2d 80 (N.J.Super. 1993), also involved a claim arising from a dealership agreement between the parties and the tort claims were derived from the facts and allegations underlying the breach of contract claim. McLaughlin contends that Newcourt can be held liable for Carpenter's alleged contractual breach under various dealer statutes, but none of those cited would support holding Newcourt liable under the facts of this case. See N.D. Cent. Code § 51-07-01.1(2) (successor in interest); S.D. Code Ann. § 37-5-4 (stating that each and every person and corporation who violates any provision of state dealer franchise law shall be liable to the dealer for damages); Minn. Stat. § 80E.03, subd. 4 (including within definition of "manufacturer" entities controlled by the manufacturer).

The court is persuaded that the Indiana Supreme Court would apply the two-year statute of limitations for actions for injury to personal property to McLaughlin's claims against Newcourt under the various state dealer and franchise laws. McLaughlin argues that the limitations period should be calculated from November 16, 1998, rather than November 22, 1998. The limitations period was tolled during the pendency of McLaughlin's motion for leave to amend from November 16, 1998 to September 9, 1999. McLaughlin's Amended Complaint was not filed until September 15, 1999, six days after its motion for leave was granted. McLaughlin offers no explanation for the short delay between the granting of its motion and the filing of its Amended Complaint. Nor does it cite any authority which establishes that the limitations period is tolled from the date a motion for leave to amend is filed through the date the amended pleading is filed. Such a rule would not encourage prompt filing of amended pleadings. In any event, there is no reason to believe that using the date of November 16 as the limitations bar rather than November 22 would make any difference in terms of the timeliness of McLaughlin's claims. The claims under the dealer and franchise statutes accrued long before either date and are therefore barred whether the appropriate date is November 16, 1992, or November 22, 1992.

The court concludes that the applicable statute of limitations bars all claims under the state dealer and franchise statutes that accrued before November 22, 1996. Summary judgment will be GRANTED Newcourt on all claims of Newcourt under such statutes. As will be seen below, entry of summary judgment is appropriate on many of these claims on other grounds in addition to the limitations bar.

2. Minnesota Franchise Act

McLaughlin brings claims under three provisions of the Minnesota Franchise Act (the "Franchise Act"), namely, Minnesota Statute §§ 80C.14, subds. 1, 3(a), 3(b). Newcourt contends that the Franchise Act is inapplicable in the absence of a franchise fee paid by the franchisee. See Martin Invs., Inc. v. Vander Bie, 269 N.W.2d 868, 874 (Minn. 1978); OT Indus., Inc. v. OT-tehdas Oy Santasalo-Sohlberg Ab, 346 N.W.2d 162, 165-66 (Minn.App. 1984). McLaughlin has admitted that it did not make any payments to Carpenter other than for goods it purchased, and McLaughlin is unaware of any fees paid to Carpenter. (Newcourt's App. Evid. Materials, vol. I, Ex. 9, T. McLaughlin Dep. 11/29/00 at 43-44.) McLaughlin's expert, Dr. McCutcheon, also testified that McLaughlin paid no franchising fee and was not in a franchising relationship. (Newcourt's App. Evid. Materials, vol. I, Ex. 12, McCutcheon Dep. 2/6/01 at 84-85.)

However, McLaughlin argues that franchise fees can include fees hidden in the franchisor's charges for good and services. Minimum volume sales requirements can constitute an indirect "franchise fee" under the Franchise Act if "the prices exceeded bona fide wholesale prices or if the distributors were required to purchase amounts or items that they would not purchase otherwise." Upper Midwest Sales Co. v. Ecolab, Inc., 577 N.W.2d 236, 242 (Minn.Ct.App. 1998); see also Banbury v. Omnitrition Int'l, Inc., 533 N.W.2d 876, 882 (Minn.Ct.App. 1995); OT Indus., Inc., 346 N.W.2d at 166. The requirements must have been unreasonable. Ecolab, 577 N.W.2d at 242; Am. Parts Sys., Inc. v. T T Auto., Inc., 358 N.W.2d 674, 677 (Minn.Ct.App. 1984).

McLaughlin maintains that its sales quotas constituted an indirect franchise fee because it would not have purchased the bodies and parts necessary to meet the quotas had it not contemplated an ongoing franchise relationship with Carpenter. (Goldsmith Aff., Exs. 24 20.) McLaughlin's evidence, however, does not raise a reasonable inference that it was required to purchase unreasonable amounts of bodies and parts that it would not otherwise have purchased. Even if McLaughlin's evidence suffices to raise a reasonable inference that it was required by Carpenter to purchase amounts or items which it would not have purchased otherwise, its evidence fails to raise a reasonable inference that the sales quotas in the distributorship agreement were unreasonable. Furthermore, McLaughlin has not claimed that any bodies or parts were not purchased at the ordinary, bona fide wholesale price. Therefore, the court concludes that the sales quotas do not constitute an indirect franchise fee.

McLaughlin next argues that it paid a hidden franchise fee when it provided the warranty work Carpenter required as a condition of its distributorship agreement and then was not reimbursed for its work. Neither Bryant Corp. v. Outboard Marine Corp., No. C93-1365R, 1994 WL 745159 (W.D. Wash. Sep. 29, 1994), aff'd 77 F.3d 488 (9^th Cir. 1996), nor Implement Service, Inc. v. Tecumseh Products Co., 726 F. Supp. 1171 (S.D. Ind. 1989), supports McLaughlin's position. In Bryant the plaintiff argued that it paid a franchise fee on the basis of providing warranty administration work for OMC boat motors which it did not generally sell. In order to constitute a "franchise fee," however, the work not only must have been performed at a discount, but also must have been rendered to the franchisor, here Carpenter. See Bryant, 1994 WL 745159, at *3; Implement Serv., 726 F. Supp. at 1178-79. Even assuming that McLaughlin's warranty work was performed at a discount, the work was performed not for Carpenter but for the benefit of McLaughlin's own customers. Thus, the court concludes that McLaughlin's performance of warranty work without reimbursement does not constitute a "franchise fee." See Implement Serv., 726 F. Supp. at 1179.

McLaughlin also suggests that its advertising costs were a hidden franchise fee. This suggestion is rejected because McLaughlin cites to no evidence which raises a genuine issue regarding whether the payments for advertising were made to Carpenter rather than to a third party. See OT Indus., 346 N.W.2d at 167; Implement Serv., 726 F. Supp. at 1178-79.

The court holds that McLaughlin has not offered evidence which raises a reasonable inference that it paid a "franchise fee" within the meaning of the Franchise Act. Therefore, the Act is inapplicable. See Martin Invs., 269 N.W.2d at 874; OT Indus., 346 N.W.2d at 165-66. Newcourt accordingly will be GRANTED summary judgment on all claims under the Franchise Act.

In addition, the statute of limitations for a claim under the Franchise Act is three years. Minn. Stat. § 80C.17, subd. 5. Thus, Newcourt argues that to the extent McLaughlin seeks recovery for any claims under the Franchise Act which arose before November 22, 1995, such claims are time barred. McLaughlin does not dispute that the applicable limitations period is three years, or that claims under the Act arising before the date identified by Newcourt are barred. It merely argues that claims accruing after that date are not barred by the statute of limitations. Thus, the court concludes that the limitations bar is another reason why summary judgment should be GRANTED on any claims under the Minnesota Franchise Act which accrued prior to November 22, 1995.

3. Minnesota Motor Vehicle Sale and Distribution Act

The Plaintiff alleges that Newcourt violated various provisions of the Minnesota Motor Vehicle Sale and Distribution Act ("MVSDA"), Minnesota Statute §§ 80E.01 et seq. Newcourt first argues that these claims are barred by the statute of limitations, which is addressed above. Newcourt also advances several other arguments why it should be granted summary judgment on these claims.

According to Newcourt, McLaughlin cannot recover under the MVSDA because it was not licensed by Minnesota as a motor vehicle dealer when it sold Carpenter buses. Under Minnesota law, "[n]o person shall engage in the business of selling new motor vehicles or shall offer to sell, solicit, deliver, or advertise the sale of new motor vehicles without first acquiring a new motor vehicle dealer license." Minn. Stat. § 168.27, subd. 2(a). It is undisputed that McLaughlin did not have a Minnesota's dealer license at the time it sold Carpenter buses and did not obtain such a license until after it filed the Minnesota action. (Newcourt's App. Evid. Materials, vol I., Ex. 3, T. McLaughlin Dep. 4/14/98 at 75, 86-87.)

While McLaughlin's lack of a motor vehicle license may have violated Minnesota Statute § 168.27 and subjected McLaughlin to statutory penalties, the court does not conclude that the lack of a license precludes it from recovering under the MVSDA. Newcourt cites no legal authority which would suggest that the licensing requirement of § 168.27 was intended to protect a credit or financing company such as Newcourt, or even a motor vehicle manufacturer such as Carpenter. Newcourt cites Metro Milwaukee Auto Auction v. Coulson, 604 N.W.2d 111 (Minn.Ct.App. 2000), review denied, but this case does not state that the Minnesota dealer licensure statute's purpose is to protect the public. Rather, the case indicates that the statute furthers the policy "to protect persons doing business with Minnesota-licensed car dealers from frauds and defaults by those dealers." Id. at 115. The protection extends most obviously to the dealer's customers; Newcourt was not a customer of McLaughlin. Moreover, McLaughlin's claims against Newcourt under the MVSDA have no connection to any alleged fraud or default by McLaughlin.

Thus, Newcourt is not a member of the class targeted for protection by the Minnesota dealer licensing law. The lack of a license to sell motor vehicles therefore should not bar McLaughlin's claims against Newcourt. See Mktg. Specialists, Inc. v. Bruni, 129 F.R.D. 35, 47 (W.D.N.Y. 1989) (holding that illegality of agreement between unlicensed manufacturer and dealer did not render contract unenforceable against dealer because manufacturer was not member of class targeted for protection by the regulatory scheme), aff'd, 923 F.2d 843 (2^d Cir. 1990); see also Gaertner v. Sommer, 714 P.2d 1316 (Ariz.Ct.App. 1986) (holding that unlicensed dealer could maintain action for breach of commission agreement where legislature had not clearly demonstrated an intent to prohibit such an action by an unlicensed dealer). Cases cited by Newcourt are readily distinguishable on this basis as the plaintiffs in those cases were members of the classes targeted for protection. See, e.g., Ransburg v. Haase, 586 N.E.2d 1295 (Ill.Ct.App. 1992) (suit by plaintiffs against individual with whom they contracted to design, decorate and manage construction of residence alleging breach of contract; contract held void on ground that defendant was not licensed as an architect in Illinois).

Nor is Newcourt a member of the class targeted for protection by the MVSDA. The stated purpose and intent of the MVSDA is "to regulate dealers of motor vehicles doing business in this state in order to prevent fraud, impositions, and other abuses upon its citizens and to protect and preserve the investments and properties of the citizens of this state." Minn. Stat. § 80E.01 (emphasis added). The MVSDA also is "designed to protect businesses from abusive tactics by manufacturers or suppliers." Pac. Equip. Irr., Inc. v. Toro Co., 519 N.W.2d 911, 919 (Minn.Ct.App. 1994) (Amundson, J., concurring) (emphasis added). Thus, the MVSDA is designed to protect dealers like McLaughlin from manufacturers and suppliers and to protect the customers of those dealers. Newcourt fits into none of these categories. The court therefore concludes that the lack of a license to sell new motor vehicles required under Minnesota Statute § 168.27 does not preclude McLaughlin from recovering against Newcourt under the MVSDA.

Newcourt next argues that it cannot be held liable under the MVSDA because the law is not designed to regulate the activities of a credit company. The MVSDA states under a provision entitled "Applicability":

The provisions of sections 80E.01 to 80E.17 shall apply to all new motor vehicle dealers and contracts existing between new motor vehicle dealers and manufacturers on May 1, 1981 and to all subsequent contracts between new motor vehicle dealers and manufacturers.

Minn. Stat. § 80E.02. Thus, the MVSDA applies to motor vehicle dealers and manufacturers within the meaning of the Act. See Minn. Stat. § 80E.03. The MVSDA also applies to distributors and factory branches, as defined in the Act. See Minn. Stat. §§ 80E.12, 80E.13. Newcourt, a credit company, does not meet the statutory definitions of motor vehicle dealer, manufacturer, distributor, or factory branch. See Minn. Stat. § 80E.03, subds. 3-6.³⁶

36 "Manufacturer" is defined in the MVSDA as "any person who manufactures or assembles new motor vehicles or any person, partnership, firm, association, joint venture, corporation, or trust which is controlled by the manufacturer." Minn. Stat. § 80E.03, subd. 4.

The court could locate no Minnesota case addressing the issue, and none were cited by the parties. However, other jurisdictions have concluded that credit companies such as Newcourt do not satisfy statutory definitions of manufacturer, distributor or franchisor in motor vehicle manufacturer, distributor and dealer statutes. See Lazar's Auto Sales, Inc. v. Chrysler Fin. Corp., No. 99 CIV. 0213 (CM), 1999 WL 123501, at *8 (S.D.N.Y. Mar. 2, 1999) (holding claim under New York Franchised Motor Vehicle Dealer Act failed because the statute did not apply to a financing company having no franchise agreement with plaintiff car dealers); Ford Motor Credit Co. v. Garner, 688 F. Supp. 435, 443-44 (N.D. Ind. 1988) (holding that automobile credit company which did not manufacture, assemble or sell motor vehicles was not a "manufacturer" under Indiana's motor vehicle manufacturer, distributor and dealer statute); Chrysler Credit Corp. v. Dioguardi Jeep Eagle, Inc., 596 N.Y.S.2d 230, 232 (N.Y.App.Div. 1993) (holding finance company not subject to claim under New York's Franchised Motor Vehicle Dealer Act). These decisions are reasonable interpretations of the applicability of these other states' motor vehicle dealer statutes, which are similar to the MVSDA.

McLaughlin maintains that Newcourt can be held liable under the MVSDA even though it is a finance company based on the evidence of Newcourt's control of Carpenter's actions. The statutory definition of "manufacturer," however, provides that a "manufacturer" includes "any person, partnership, firm, association, joint venture, corporation, or trust which is controlled by the manufacturer." Minn. Stat. § 80E.03, subd. 4. In responding to the summary judgment motion, McLaughlin has not pointed to evidence that Newcourt is controlled by Carpenter, but rather argues that Newcourt controlled Carpenter's actions. Yet, McLaughlin cites no authority to establish that the statutory definition extends to an entity which controls the manufacturer.

However, in its surreply, McLaughlin argues that it has evidence that Newcourt was controlled by Carpenter, citing to the Goldsmith Affidavit, Exhibits 23 and 46, exhibits under seal. Having reviewed the affidavit and exhibits, the court fails to discern how they raise a genuine issue regarding Carpenter's control of Newcourt.³⁷

37 Exhibit 23 is a copy of a letter from Newcourt to Timothy Durham, President of Carpenter, dated June 30, 1994, offering to purchase Carpenter Financial Inc., with attached Schedules. Exhibit 46 is a copy of a letter from Bradley Nullmeyer of Newcourt to James Cochran, President of Carpenter Financial Inc., offering terms of employment.

The court concludes that Newcourt cannot be held liable under the MVSDA because the law is not intended to regulate a credit company such as Newcourt. For this reason, summary judgment should be GRANTED Newcourt on the claims under the MVSDA.³⁸ 4. Montana Sales and Distribution of Motor Vehicles Act

38 Summary judgment on the claim under Minnesota Statute §§ 80E.12 also is appropriate because McLaughlin has not contested Newcourt's assertion that there is insufficient evidence to establish a violation of that provision. Summary judgment also should be granted on § 80E.13, subd. (j) because McLaughlin has presented no evidence that Newcourt prevented it from "receiving fair and reasonable compensation for the value of the new motor vehicle dealership." Minn. Stat. § 80E.13, subd. (j).

Newcourt argues, just as it did with respect to the MVSDA, that McLaughlin cannot recover under the Montana Sales and Distribution of Motor Vehicles Act ("SDMVA") because it had no license to sell motor vehicles in the state of Montana. The court finds this argument unavailing under the Montana statute for the same reasons it was unavailing with respect to the MVSDA. See supra at Section VIII. E. 3. There is no clear indication that the Montana legislature intended that a lack of a license bar claims under its SDMVA. And, Newcourt offers nothing to suggest that the license requirement was intended to protect a finance credit company such as it. Instead, Montana courts have said that the statute was "to protect motor vehicle franchisees and dealers from those injuries to which they were susceptible by virtue of the economic inequality between themselves and their franchisors." Statewide Rent-A-Car, Inc. v. Subaru of Am., 704 F. Supp. 183, 185 (D. Mont. 1988).³⁹ The court accordingly finds unpersuasive Newcourt's argument that McLaughlin cannot recover under the SDMVA simply because it was not licensed by Montana as a motor vehicle dealer at the time McLaughlin sold Carpenter buses. The like argument made with respect to the South Dakota Vehicle Dealers Act is unpersuasive for the same reasons.

39 If Newcourt intends to argue that McLaughlin cannot bring a claim under the statute because it never had a place of business in Montana, the court is unaware of any such requirement.

5. North Dakota "Miscellaneous" Provision

Newcourt maintains that the Plaintiff's claim under a "miscellaneous" provision of the North Dakota Century Code, namely N.D. Cent. Code § 51-07-01.1, cannot survive summary judgment because Newcourt cannot be held liable under this provision. Newcourt argues that the provision is inapplicable because Carpenter did not sell the items identified in the provision such as farm implements, machinery and trucks. The court has found no case interpreting this provision which concludes that buses are included within the merchandise and tools covered by the provision. No case interpreting the provision to the contrary has been located either.

The court is hesitant to conclude that the failure to expressly mention buses in the statute precludes recovery if otherwise available. A reasonable argument could be made that a bus is a type of truck. It makes sense to apply the provision to other motor vehicles such as buses; to do so furthers the purpose of the provision upon which McLaughlin relies, which is "to equalize the disparity in bargaining power between manufacturers and dealers, and to protect dealers from a termination based solely upon a manufacturer's subjective whim and caprice." Williston Farm Equip., Inc. v. Steiger Tractor, Inc., 504 N.W.2d 545, 549 (N.D. 1993). Newcourt offers nothing to suggest that such a disparity does not exist between manufacturers and dealers of buses, whereas, it does exist between manufacturers and dealers of other motor vehicles such as farm machinery, automobiles and trucks.

Newcourt claims that since the Plaintiff and Newcourt did not have a contract for the retail sale of farm implements, machinery, automobiles, trucks, or repair parts therefore which were manufactured, distributed or sold by Newcourt, the provision is inapplicable. To the extent Newcourt's position is that it cannot be held liable because it is a credit company rather than a manufacturer or distributor, this argument finds support in case authorities from other jurisdictions. See Ford Motor Credit Co. v. Garner, 688 F. Supp. 435, 443-44 (N.D. Ind. 1988) (credit company cannot be held liable under Indiana deceptive practices franchise law because it is not a manufacturer); Chrysler Credit Corp. v. Dioguardi Jeep Eagle, Inc., 596 N.Y.S.2d 230, 232 (N.Y.App.Div. 1993) (holding that finance company having no franchise agreement with dealer was not subject to suit under New York franchised motor vehicle dealer act). The parties have not cited, and the court has not found, any North Dakota decision addressing the issue.

However, the statutory provision at issue expressly provides that:

The obligations of any wholesaler, manufacturer, or distributor under this section and sections 51-07-01.1 and 51-07-03 apply to any successor in interest or assignee of that wholesaler, manufacturer, or distributor. A successor in interest includes any purchaser of assets or stock, any surviving corporation or limited liability company resulting from a merger or liquidation, any receiver, or any trustee of the original wholesaler, manufacturer, or distributor.

N.D. Cent. Code § 51-07-01.4. McLaughlin maintains that Newcourt Financial could be considered a successor in interest under this provision because it is a surviving corporation resulting from a merger with Carpenter Financial. As evidentiary support, McLaughlin cites to the Goldsmith Affidavit, Exhibit 11, which is a copy of a news release with a fax date of July 20, 1994. The news release, apparently from Newcourt Credit Group, indicates that Newcourt Credit Group acquired Carpenter Financial Inc. ("CFI"). (Goldsmith Aff., Ex. 11 at 1.) The release states that Newcourt will assume the business operations of CFI, which is described as "the captive finance company operated by Carpenter Manufacturing" and that Newcourt "will acquire CFI's existing portfolio of customer financings and funding commitments valued at $30 million." ( Id.)

The court finds this evidentiary submission insufficient to raise a genuine issue as to whether Newcourt is a successor in interest to Carpenter Manufacturing. Even assuming that Newcourt purchased assets of CFI, or merged with CFI, or both, McLaughlin has not offered sufficient evidence to raise a genuine issue as to whether CFI and Carpenter Manufacturing were one and the same, or alter egos of each other. In contrast, evidence submitted by McLaughlin seems to suggest that CFI was a separate entity from Carpenter Manufacturing, Inc. ( See Goldsmith Aff., Ex. 23.)

McLaughlin has not persuasively responded to all of Newcourt's arguments regarding why the North Dakota statutory provision is inapplicable to Newcourt. Therefore, summary judgment should be GRANTED the Defendants on the claim under the "miscellaneous" North Dakota provision, North Dakota Century Code § 51-07-01.1.

6. South Dakota Vehicle Dealers Act

According to Newcourt, McLaughlin cannot pursue its claims under the South Dakota Codified Laws §§ 32-6B-45 through -56 because it did not exhaust its administrative remedies and there is no provision in the statute for a private right of action. The court has considered this argument and is not persuaded by it. As addressed previously, however, the claims under the South Dakota Vehicle Dealers Act, are barred by the applicable statute of limitations and summary judgment is therefore granted Newcourt on these claims.

F. COUNT VI: INTERFERENCE WITH CONTRACT PROSPECTIVE BUSINESS RELATIONSHIP, BREACH OF FIDUCIARY DUTY BREACH OF THE DUTY OF GOOD FAITH FAIR DEALING

According to Newcourt, it should be granted summary judgment on the claim of tortious interference with contract and prospective business relationship. Newcourt contends that the applicable statute of limitations is two years and therefore bars this claim in that it accrued before November 22, 1996. Several courts applying Indiana law have applied the two-year statute of limitations for injuries to personal property to claims of tortious interference with contract or business relationships, or both. See C E Corp. v. Ramco Indus., Inc., 717 N.E.2d 642, 644 (Ind.Ct.App. 1999) (applying two-year statute of limitations to claim for tortious interference with contract); GL Indus., Inc. v. Forstmann Little, 800 F. Supp. 695, 700 (S.D. Ind. 1991) (dismissing claim for tortious interference with a business relationship as barred by the applicable two-year statute of limitations applicable to injuries to personal property); Kaken Pharm. Co. v. Eli Lilly Co., 737 F. Supp. 510, 519-20 (S.D. Ind. 1989) (dismissing claims of tortious interference with contractual relationship and tortious interference with prospective business relations as barred by two-year statute of limitations for injuries to personal property). This court agrees with these decisions that the statute of limitations for injuries to personal property governs a claim for tortious interference with a contract and a claim for tortious interference with a prospective business relationship.

McLaughlin believes that Newcourt does not seek summary judgment on its claims for tortious interference with prospective business relations or on its claim of interference with the Carpenter contract. Newcourt, however, seeks summary judgment on "McLaughlin's claims of tortious interference" (Br. Supp. Defs.' Mot. Summ. J. at 68), which includes these claims. There is no contrary suggestion in Newcourt's brief.

McLaughlin alleged claims for tortious interference with contract and prospective business relations in its Complaint filed in the Minnesota action on July 25, 1996. These same claims against Newcourt arise out of the same allegations and time period. Moreover, McLaughlin offers nothing to suggest that its tortious interference claims accrued after July 25, 1996, or, for that matter, after November 16 or 22, 1996. Therefore, the court concludes that the two-year statute of limitations of Indiana Code § 34-11-2-4(2) bars McLaughlin's claims against Newcourt for tortious interference with contract and prospective business relations. Summary judgment will be GRANTED Newcourt on these claims.

Newcourt seeks summary judgment on the Plaintiff's breach of fiduciary duty claim. McLaughlin represents in its response brief that it withdraws that claim. (Pl.'s Mem. Resp. Defs.' Mot. Summ. J. at 72.) Thus, summary judgment will be GRANTED Newcourt on that claim.

The Defendants contend they should be granted summary judgment on the breach of the duty of good faith and fair dealing claim because Indiana does not recognize this cause of action under the circumstances of this case; and under North Dakota law, an essential element of the claim is the existence of a contract between the parties, and Newcourt and McLaughlin never entered into any contract.

Indiana law recognizes a cause of action for a breach of an implied covenant of good faith and fair dealing only where the parties' intentions cannot be ascertained readily, where the contract is an insurance contract, or the parties have a fiduciary relationship. See, e.g., First Fed'l Savs. Bank v. Key Markets, Inc., 559 N.E.2d 600, 604-05 (Ind. 1990); Beacham v. Macmillan, Inc., 837 F. Supp. 970, 975 (S.D. Ind. 1993). McLaughlin does not dispute this. Newcourt also is correct that under North Dakota law, in order for a party to have a claim for the breach of the duty of good faith, there must exist a contract or duty owing under the Uniform Commercial Code. Union State Bank v. Woell, 434 N.W.2d 712, 716 (N.D. 1989). The record establishes that Newcourt and McLaughlin never had any agreement, and McLaughlin points to no duty arising under the UCC which may apply in the situation presented.

McLaughlin argues that the duty of good faith and fair dealing arises from the representations of Carpenter-Newcourt and a long course of dealing. McLaughlin implies that there was a contractual relationship because it has alleged that Newcourt engaged in a conspiracy with Carpenter and aided and abetted Carpenter, with whom McLaughlin did have a contractual relationship. The complete failure to offer any legal authority to support these arguments leaves McLaughlin's position untenable. Therefore, summary judgment will be GRANTED Newcourt on the Plaintiff's claim that it breached a duty of good faith and fair dealing.

IX. PLAINTIFF'S MOTIONS FOR ORAL ARGUMENT

McLaughlin has twice moved the court for oral argument on pending motions. Because the court is able to reach a determination of all issues in this case based on the voluminous record before it, oral argument is unnecessary. Therefore, the Plaintiff's motions for oral argument are DENIED.

X. CONCLUSION

For the foregoing reasons (1) the Defendants' Motion for Summary Judgment (docket #148) will be GRANTED as to all of the Plaintiff's claims, (2) the Plaintiff's Motion for Partial Summary Judgment (docket #155) is DENIED, (3) the Defendants' Motion to Strike McCutcheon Opinions (docket # 192) is GRANTED, (4) the Defendants' Motion to Strike (docket #194) is GRANTED IN PART AND DENIED IN PART, (5) the Motion to Strike Defendants' Objections in Reply to Plaintiff's Statement of Additional Material Facts (docket # 211) is DENIED, (6) the Objection to Plaintiff's Surreply to Motion for Summary Judgment and Plaintiff's Statement of Additional Material Facts and Evidence on Surreply is OVERRULED as to the surreply brief but SUSTAINED as to the Statement of Additional Material Facts and Evidence on Surreply, and (7) the Plaintiff's Motions for Oral Argument (docket ##185 229) are DENIED.

ALL OF WHICH IS ENTERED.