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MENASHA CORPORATION v. NEWS AMERICA MARKETING IN-STORE

January 7, 2003

MENASHA CORPORATION, PLAINTIFF,
v.
NEWS AMERICA MARKETING IN-STORE, INC. AND NEWS AMERICA MARKETING IN-STORE SERVICES, INC., DEFENDANTS.



The opinion of the court was delivered by: Harry D. Leinenweber, United States District Court

  MEMORANDUM OPINION AND ORDER

Plaintiff Menasha Corporation ("Menasha") brought this action alleging that Defendants News America Marketing In-Store, Inc. and News America Marketing In-Store Services, Inc. (collectively referred to as "News America") violated federal and state antitrust laws by entering into exclusive contracts with retail chains for the placement of at-shelf coupon dispensers and by exercising its monopoly power in the market for at-shelf coupon dispensers to foreclose competition. Now before the Court are News America's Motion for Summary Judgment, Motion In Limine to Exclude the Report and Testimony of James Tenser and the Opinions of Dr. James Langenfeld That Rely on Tenser's Survey Research, Motion to Strike Menasha's Responses to Defendants' Local Rule 56.1 Statement of Facts, and Motion to Strike Menasha's Statement of Facts under Local Rule 56.1. Also, before the Court is Menasha's Motion In Limine to Exclude the Relevant Market Opinions of Drs. Rapp and Stiroh.

BACKGROUND

Manufacturers of packaged goods rely on a variety of mediums to advertise and promote their products to consumers. One of the methods manufacturers sometimes choose to promote their products is the placement of a coupon dispenser next to the product on retail store shelves (referred to as "at-shelf coupon dispensers"). An at-shelf coupon dispenser is not the only method of placing coupons in proximity to product, other methods include "on-pack coupons" attached directly to the product, "tear pad coupons" affixed to the shelf near the product, and in-store demonstrations, at which demonstrators distribute coupons to consumers along with samples of the product. In addition, manufactures may choose from a variety of other in-store marketing vehicles to target consumers — shopping cart ads, shelf signs, manufacturers' displays, and supermarket flyers to name a few. Menasha and News America are both in the business of selling such in-store marketing products to manufacturers of packaged goods.

At issue in this case is one particular in-store marketing product: at-shelf coupon dispensers. News America sells an at-shelf coupon dispenser consisting. of a reusable plastic container with a blinking red light that contains manufacturers' coupons for consumer packaged goods. News America sells at-shelf coupon dispensers directly to manufacturers, typically guaranteeing placement in particular retail chains. News America also offers manufacturers the guarantee of "category exclusivity," meaning that the manufacturer is assured that no other at-shelf coupon dispenser in a specific product category will be placed in particular retail stores during an agreed-upon period. News America is able to guarantee category exclusivity to manufacturers by entering into multi-year contracts with retail chains under which News America is granted the exclusive right to place at-shelf coupon dispensers in the chain's stores. In exchange, News America offers the retailers a percentage of the revenues News America derives from the sale of at-shelf coupon dispensers to manufactures for placement in that chain's stores.

Menasha sells manufacturers a disposable at-shelf coupon dispenser made of paper. However, adhering to a different business model from that of News America, Menasha does not promise manufacturers category exclusivity, nor does Menasha offer to enter into revenue sharing agreements with retail chains in exchange for exclusive access to their stores. In recent years, News America has enjoyed great success in expanding its business in at-shelf coupon dispensers, while Menasha's expectations for the growth of its at-shelf coupon business have not been fulfilled.

Menasha believes that News America has violated federal and state antitrust laws by entering into exclusive contracts with retail chains for the placement of at-shelf coupon dispensers. Menasha also contends that News America exercises monopoly power in the market for at-shelf coupon dispensers, and that News America has used its market power to foreclose competition. Accordingly, Menasha brought the present action alleging unreasonable restraint of trade in violation of Section 1 of the Sherman Act (Counts I and II), monopolization and attempted monopolization in violation of Section 2 of the Sherman Act (Counts III and IV), monopolization and attempted monopolization in violation of the Illinois Antitrust Act (Counts V and VI), restraint of trade in violation of the Illinois Antitrust Act (Count VII), "inducing refusals to deal" in violation of the Illinois Antitrust Act (Count VIII), unfair methods of competition (Count IX), and tortious interference with business relationships (Count X). Now before the Court are News America's Motion for Summary Judgment, Motion in Limine to Exclude the Report and Testimony of James Tenser and the Opinions of Dr. James Langenfeld That Rely on Tenser's Survey Research, Motion to Strike Menasha's Responses to Defendants' Local Rule 56.1 Statement of Facts, and Motion to Strike Menasha's Statement of Facts Under Local Rule 56.1. Also, before the Court is Menasha's Motion In Limine to Exclude the Relevant Market Opinions of Drs. Rapp and Stiroh. The Court will begin by addressing the parties' motions to strike and motions in limine.

MOTIONS TO STRIKE

Menasha's Statement of Material Facts

News America requests that the Court strike in its entirety the document entitled "Menasha's Statement of Material Facts Under L.R. 56.1," which Menasha submitted as a response to the Statement of Material Facts accompanying News America's Motion for Summary Judgment. Menasha states that this document was "submitted in reply to [News America's) Statement as a total replacement." (emphasis added). But, as News America correctly points out, Local Rule 56.1 in no way authorizes a "total replacement" in response to a movant's statement of facts.

Under Local Rule 56.1(a)(3), a party moving for summary judgment must submit a statement, of material facts in the form of short numbered paragraphs supported by specific references to the factual record. News America submitted such a statement. Under Local Rule 56.1(b)(3), two types of submissions are permitted in response to a moving party's Rule 56.1 statement of facts: (1) a response to each numbered paragraph supported by references to the record, and (2) a statement of short numbered paragraphs setting forth additional facts that require denial of summary judgment, supported by citations to the record. L.R. 56.1(b)(3)(A)-(B). The "total replacement" submitted by Menasha completely disregards these requirements — it is neither a response to News America's Statement of Material Facts nor is it a true statement of additional facts as contemplated by Local Rule 56.1.

Local Rule 56.1 serves the important function of structuring the summary judgment process so as to "assist the court by organizing the evidence, identifying undisputed facts, and demonstrating precisely how each side propose[s] to prove a disputed fact with material evidence." Markham v. White, 172 F.3d 486, 490 (7th Cir. 1999). By filing an unauthorized "alternative" statement of facts, Menasha's counsel seriously hindered the Court's ability to perform its task of identifying those facts actually in dispute. See Bordelon v. Chicago School Reform Bd. of Trustees, 233 F.3d 524, 527-28 (7th Cir. 2000). However, as News America has already gone to the trouble of responding to this document, the Court will treat this submission a statement of additional facts. Nevertheless, in ruling on News America's Motion for Summary Judgment, the Court will disregard all argumentative, conclusory, unsupported or otherwise non-conforming portions of Menasha's "Statement of Material Facts Under L.R. 56.1."

Menasha's Response to News America's Statement of Facts

News America also requests that the Court strike Menasha's Response to News America's Rule 56.1 Statement of Facts. News America has taken great pains to meticulously detail the numerous shortcomings in Menasha's Response. News America correctly points out that Menasha's Response is replete with improper argument, general denials, responses unsupported by citations to the record, and citations to large documents with no guide as to where in the document the purported fact is to be found. Although it is within this Court's discretion to enforce Local Rule 56.1 strictly, Bordelon, 233 F.3d at 527, the Court declines to impose the harsh penalty of striking Menasha's Response in its entirety. Nevertheless, in reaching its ruling, the Court will disregard all argumentative, conclusory, or unsupported portions of Menasha's Response to News America's Rule, 56.1 Statement of Facts.

MOTIONS IN LIMINE

News America and Menasha have filed dueling motions to exclude the other's expert opinion defining the relevant antitrust market in this case. The Court will begin with News America's Motion to Exclude the Report and Testimony of James Tenser and the ...


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