Procaps S.A. v. Patheon Inc. (141 F. Supp. 3d 1246, 2015)

ORDER ON DEFENDANT PATHEON’S SUMMARY JUDGMENT MOTION

Jonathan Goodman, UNITED STATES MAGISTRATE JUDGE

This litigation arose out of a Collaboration Agreement between two companies involved in the pharmaceutical business, Plaintiff Procaps S.A. (“Procaps”) and Defendant Patheon Inc. (“Patheon”). Procaps and Patheon have spent much of the past three years involved in an expensive, bitter, time-consuming, and hard-fought legal battle in federal court. Procaps contends that Patheon, in effect, turned on it relatively soon after their Collaboration Agreement was formed by acquiring ■ Procaps’ principal competitor, Banner Pharmacaps (“Banner”).

The Collaboration Agreement, however, contains a dispute resolution clause which requires breach of contract claims, fraud in the inducement claims and disputes other than a limited list of excluded claims to be resolved through 'arbitration. An antitrust claim is one of the few types specifically excluded from the mandatory arbitration provision. Procaps decided to file an antitrust lawsuit.

Although Procáps agreed (and still agrees) that the Collaboration Agreement was lawful' when initially enacted even though it contained horizontal market allocation provisions, it later alleged that Pa-theon transformed ''the Collaboration' Agreement into an illegal - restraint when it acquired Banner.

Over the past three years, Procaps has developed evidence which, if accepted by a fact-finder in a breach of contract claim, could support a compelling narrative about a company wronged by a business partner who should have been working with it under the comprehensive written Agreement. But, as noted, the Collaboration Agreement bans a traditional breach of contract lawsuit (i.e., it must be arbitrated)/ so the issue now is whether Patheon is entitled -to a ruling in its favor on its summary judgment motion [ECF No. 889] targeting Procaps’ remaining federal antitrust claim;

The Court has reviewed. the motion, briefs., proposed .orders, and. evidentiary record, and heard oral argument at a hearing lasting almost eight hours on September 24, 2015. For the reasons set forth below, the Court grants Patheon’s motion.

I. Introduction

Procaps and Patheon entered into a Collaboration Agreement (the “Agreement”) to work together to produce and market a new brand of softgel capsules called P-Gels. Several months later, Patheon acquired Procaps’ main competitor, Banner. Procaps then filed this lawsuit, alleging that the acquisition made the Agreement illegal under federal and state antitrust laws. The case has been vigorously litigated.

Among other salient rulings, on February 25, 2013, the District Court denied Patheon’s motion to dismiss, holding that Procaps stated a per se claim for violation of the Sherman Act. [ECF No. 50]. After a more fully-developed record, however, and after discovery had closed, the Undersigned ruled on the parties’ cross-motions for summary judgment and determined that the restraint embodied in the Agreement should be analyzed under a rule of reason “meet” for this case, the precise structure of which the Court would later determine. [ECF No. 565]. The Court subsequently ruled that Patheon could take additional rule of reason discovery and file a second summary judgment motion.

Patheon later filed a second summary judgment motion. It now contends that it is entitled to summary judgment for four reasons, any one of which is sufficient to sustain a defense summary judgment: (1) There were no substantial actual detrimental effects on competition as a result of the removal of the Banner assets from the relevant markets; (2) Procaps did not, and cannot, prove substantial marketwidé harm; (3) Procaps has the burden of proving the absence of all pro-competitive benefits or justifications, which it failed to satisfy; and (4) Procaps lacks antitrust standing because it has not been excluded entirely from the relevant markets.

As discussed in greater detail later, the Court notes that the parties strongly disagree about the applicable legal principles which control the resolution of many issues underlying the summary judgment motion. In some instances, the parties take diametrically opposed positions, with one party representing that the law is one way and the other party stridently proclaiming that the law is exactly the opposite. Given the procedural history here, these basic legal disconnects are hardly surprising, though the degree of wrangling over the applicable law is atypical. In any event, the Undersigned grants Patheon’s summary judgment motion on the first two grounds (but not on the third and fourth grounds).

II. The Facts

A significant part of the background of this case is set forth in the Court’s previous summary judgment order. [ECF No. 565]. Other portions were developed after the initial round of summary judgment briefing and the order on those motions. Viewing the evidence and inferences in the light most favorable to Procaps, as the Court must do, the salient facts are these:

In January 2012, Patheon (the number two provider of commercial manufacturing operations worldwide in most delivery formats, except softgels). and Procaps (the largest manufacturer of softgels in South America) entered into the Collaboration Agreement to market product development services (“PDS”) and commercial manufacturing outsourcing (“CMO”) of softgels to third parties under the “P-Gels” brand (the “Collaboration”). Patheon would market P-Gels to potential customers and Procaps would provide development and manufacturing services through its Colombian facility. The parties’ own products were excluded.

Field Limited to Prescription Drugs. In the Collaboration Agreement, Patheon and Procaps defined the collaboration’s “Field” as “prescription pharmaceutical” products for the treatment of human diseases and maintenance of human health. [ECF No. 333-1, §§ 1.10, 2.1]. With minor exceptions, nutritional and over-the-counter softgels are excluded from the Collaboration.

Manufacturing. Under the agreement, Procaps has “the sole right and responsibility to perform or have performed all Commercial Manufacturing Activities.” [ECF No. 333-1, § 3.2].

Territory Limited. The Collaboratioris “Territory” is nominally worldwide but excludes large geographies, including countries where Procaps has an independent presence. [ECF No. 333-1, §§ 1.9, 1.22].

Exclusivity. In the Collaboration Agreement, each party agreed to “exclusively develop, market and provide the Soft Gel Branded Services in the Territory through [the] collaboration” with the other party, and agreed neither would “develop, Manufacture, promote, or otherwise commercially exploit ... Soft Gel Capsules in the Field for use or sale in the Territory” (i.e., for prescription drug manufacturing services in the Territory). [ECF No. 333-1, § 10.2].

Expansion by Patheon. Patheon also agreed not to expand its current manufacturing capacity for softgel capsules for prescription drugs at its facility in Cincinnati, Ohio for use or sale in the Territory, except with Procaps’ approval. [ECF No. 333-1, § 10.3].

Limitations on Collaboration. The Collaboration contains certain limits. For example, the Collaboration Agreement concerns the manufacturing of drugs owned by third-party customers, and not Patheon’s or Procaps’ own prescription drugs. [ECF No. 333-1, §§ 1.6, 1.7, 1.8, 1.11, 3.5, 10.5], Thus it excludes, “Internal Development Products,” defined to include prescription drugs for which Patheon or Procaps is the owner — as opposed to third-party customers’ prescription drugs. Id. The Collaboration Agreement is also clear that either party can independently “develop, manufacture, sell and otherwise exploit” softgels' outside the Field (i.e., soft-gels other than for prescription drugs) and outside the Territory. [ECF No. 333-1, § 10.5].

Six Month Grace Period After Acquisitions. The parties expressly contemplated that either Patheon or Procaps might acquire, during the term of the Collaboration Agreement, a third party that also provides softgel services to third party customers for prescription drugs. Section 10.4(b) provides that if either party acquires a company that bears on the exclusivity or capacity restrictions in sections 10.2 or 10.3, it would have a six-month grace period after the acquisition to address the issue, by either divesting the overlapping business or by bringing it into the Collaboration. The Agreement provides:

If during the Term a Party or any of its Affiliates acquires an entity by a Change of Control of a Third Party that would cause such Party or its Affiliates to be in breach of Sections 10.2 or 10.3 at the closing of such acquisition, then the acquiring party shall give advance notice to the other Party or make a public announcement of such acquisition, and the acquiring party must within six (6) months of such acquisition either (i) divest such portion of the acquired business that would be' restricted by Sections 10.2 or 10.3 to a Third Party, or (b) include under this Agreement such portion of the acquired business1 solely with respect to any business or intellectual property activities conducted by the acquiring Party following the date of such acquisition.

[ECF No. 333-1, § 10.4(b) ] (emphasis supplied).

Collaboration Agreement. Dispute Resolution Procedures. The Agreement also provides a mechanism for Procaps and Patheon to resolve disputes between them. The companies agreed to attempt to resolve disputes “in an expedient manner by mutual cooperation and without resort to litigation.” The companies agreed “to follow the procedures set forth” to resolve “any controversy or claim arising out of’ or “relating to” the Collaboration. [ECF No. 333-1, § 14.1].

These procedures specify that if the parties are “unable to resolve-[a] dispute within thirty (30) days after such dispute.is first identified” by either party in writing to the other, then the companies “shall refer such dispute to the Chief Executive Officers” (“CEOs”) of the parties for attempted resolution by good faith negotiations. If the CEOs are unable to resolve the matter during an additional 30-day period, then the agreement requires arbitration of most claims (including those for breach of contract), but it allows for litigation of antitrust disputes. [ECF No. 333-1, §§ 14.2-14.4].

The Collaboration allocated manufacturing opportunities to Procaps. [ECF No. 565, p. 7]. It was amended to include nonprescription softgels for 10 customers. [Id., at p. 7, n.3]. Although the Collaboration excluded drugs for several customers, the parties bid on at least two of those drugs (dutasteride and omega-3 acid ethyl esters). [ECF No. 889, p; 8; Exs. 2-6].

As outlined above, the Agreement contained a market allocation provision. As this Court has described it, all CMO opportunities were allocated to Procaps, while PDS opportunities were allocated between the parties by mutual agreement. Neither party individually could develop or manufacture softgels within the scope of the Agreement. The parties both agree that the Agreement allocated markets and customers. [ECF Nos. 487, pp. 36, 137; 331, ¶ 7]. This Court likewise concluded that- the Agreement “allocated markets and customers among horizontal competitors.” [ECF No. 565, p. 8].

The parties nonetheless concur that the Agreement, even though it is one which allocated markets and customer's, was pro-compétitive and lawful when it originated because it combined the complementary assets and capabilities of two companies who individually lacked the assets essential to compete in these markets and introduced a new competitor and a new softgel offering, P-Gels, into the marketplace. [ECF No. 565, p, 8].

From December 2011 to December 2012, the Collaboration bid on 43 projects but “won only two projects for a total of $123,003 in revenue.” [ECF No. 565, p. 9]. Procaps’ economist, Dr. Roger D. Blair (“Blair”), opined that the Collaboration was “largely unsuccessful.” [Ex.- 7],

By August 2012, Patheon, without telling Procaps, began to reconsider whether it had chosen the right “partner.” [ECF No. 335, ¶ 24]. Patheon began considering (again) entering into a strategic relationship with Banner, the “#2” player in the prescription and over-the-counter (“OTC”) softgel market by size. [ECF No. 335, ¶ 10,]-

By October 2012, Procap's reported that “‘P-Gels came late’” to the-market [Ex. 8], and Patheon told Procáps that it was considering an acquisition of Banner, a softgel competitor: [ECF No. 565* p. 9]. On October 22, 2012, during a meeting in Miami, Patheon notified Procaps that it might acquire Banner, and it proposed that Banner join the parties’ collaboration. [ECF No. 333, ¶ 14]. •

Procaps began to analyze the pros and cons of integrating Banner. Procaps had some initial predictions that procompeti-tive benefits would result from integrating the Banner assets. [Id., at ¶¶ 17-18]. But it never gave Patheon its blessing to bring in Banner. [Id., ¶ 26]. On October 29, 2012, Patheon went ahead and signed the Stock Purchase Agreement to acquire Banner without Procaps’ approval. [Id,].

By the beginning of- November 2012, after further thought, • Procaps believed that it could not continue performing under the Agreement because it believed the Collaboration had become an illegal horizontal restraint on trade. [ECF No. 333, ’¶ 15]. At the same time; -some Patheon executives also believed that Banner’s acquisition was problematic. [ECF No. 335, ¶¶ 32-33]. In'particular, they believed it created a conflict of interest for Patheon because both Banner and- Procaps were engaged in the -manufacture and sale of prescription softgels. [M].

The parties met in November 2012 to try and work -out a solution to continue working together. [ECF No. 333, ¶ 16]. But this “strategic relationship” was, for all intents and purposes,. over. Patheon suggested a few ways where all three entities could work together., [ECF No. 396, ¶ 14]..Procaps rejected all-pf Patheon’s suggestions and offered none. [Id.], Instead, Procaps focused on getting Patheon to pay it to leave the Collaboration Agreement or to divest Banner. [ECF No. 333, ¶ 20]. Patheon was not willing to do either.

After the November 2012 discussion failed to' produce a resolution, some Pro-caps’ executives predicted, in email correspondence, that if Procaps filed a lawsuit to interfere with the Banner acquisition, then--Patheon would5 be willing to settle and pay Procaps to leave the Collaboration Agreement. [ECF No. 333, ¶ 20]; On December 10, 2012, before the acquisition closed, Procaps filed its complaint. [ECF No. 1]. Procaps did not challenge Pa-theon’s acquisition .of Banner as violating any antitrust laws. Rather, Procaps .claimed that the parties were not competitors before the Collaboration Agreement, but that the acquisition would transform them into competitors. According to Pro-caps, :this would in turn transform the Collaboration Agreement’s allocation into an unlawful horizontal restraint on trade.

In the lawsuit, Procaps sought to “terminate” the Collaboration and “enjoin” the acquisition on the grounds that the acquisition transformed the Collaboration into a per se unlawful horizontal allocation in violation of Section 1 of the Sherman Act. [ECF No. 1]. Procaps immediately stopped participating in the Collaboration. [Exs. 22-23].

After its initial dismissal motion was denied, Patheon moved for summary judgment. One of its primary arguments was that Procaps failed to establish the requisite agreement to establish a violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Patheon argued that despite Procaps being a party to the Collaboration Agreement, there was no agreement to unlawfully and unreasonably restrain trade because Procaps neither agreed to the activity which it says created the unreasonable restraint — the Banner acquisition — nor participated in Patheon’s attempted allocation post-acquisition.

In other words, Patheon’s argument was that the Collaboration Agreement is not, standing alone, sufficient to ■ constitute the requisite agreement under Section 1. Rather, Procaps must have agreed to participate in the activities which Procaps contends made the Collaboration Agreement illegal. And, as Patheon points out, Pro-caps never agreed to do that. Consequently, Patheon contended, there is no concerted action; there is only unilateral action— its own.

But, according to Procaps, the Collaboration Agreement itself satisfies Section l’s agreement requirement. Procaps argued that under the Agreement, Patheon has the right to control Procaps’ participation in the Field and Territory. Although that agreement was originally lawful, Procaps argued, it became unlawful after the Banner acquisition because now Patheon could control Procaps’ and Banner’s participation in the Field and Territory. Further, Procaps argued that there is no requirement for a Section 1 violation that it subjectively agree or acquiesce to the post-acquisition illegal activities under the Collaboration Agreement.

The Undersigned was not convinced by Patheon’s argument in its initial summary judgment motion and rejected the defense theory that it was entitled to summary judgment on the ground that Procaps failed to establish concerted action. [ECF No. 565]. Patheon has not abandoned that argument, however. Therefore, if Procaps were to appeal this summary judgment order, then Patheon would not be foreclosed from again asserting its theory that only its own unilateral action (i.e., not an agreement required for a Section 1 violation) was involved in the purported unlawful restraint. Thompkins v. Lil’ Joe Records, Inc., 476 F.3d 1294, 1302 (11th Cir.), cert. denied, 552 U.S. 1022, 128 S.Ct. 613, 169 L.Ed.2d 393 (2007) (reviewing court can affirm summary judgment on any legal ground, regardless of the grounds addressed and relied upon, by the lower court). See generally Nat’l R.R. Passenger Corp. v. Rountree Transp. and Rigging Co., 286 F.3d 1233, 1263 (11th Cir.2002) (appellate court may affirm ruling below “as long as the judgment entered is correct on any legal ground regardless of the grounds addressed, adopted or rejected by the district court”).

The restraint, the alleged actual detrimental effects, and the relevant markets:

According to Procaps, the alleged restraint is a “contractual obligation, pursuant to the Collaboration Agreement, to remove the Banner assets from the relevant markets for the duration of the Collaboration.” [ECF No. 822, p. 3]. The alleged detrimental effects on competition are “the simultaneous removal of the Banner assets from the relevant markets and the Patheon/Procaps Collaboration ceasing to compete in the relevant markets” [ECF No. 822, p. 3], which Procaps refined (in its opposition to the summary judgment motion) by alleging that the effects were, not “the elimination of a competitor” but the fact that in a “market division agreement, ‘a source of supply is removed from the market.’ ” [ECF No. 931, p. 23, n. 9].

In order to avoid providing discovery about markets, Procaps agreed to Pa-theon’s “uncontested” and “unassailable” market definition if it had to proceed under the rule of reason. [ECF No. 565, p. 37 & n. 8]:

(1) contract development and manufacturing of prescription softgels for sale in the U.S., and (2) contract development and manufacturing of nonprescription softgels for sale in the U.S. by the ten buyers specified in an amendment to the parties’ Collaboration Agreement.

[Ex. 25, p. 4]. According to Procaps’ Response to Patheon’s New Interrogatories, Banner’s market share in the relevant markets was 6%; the Collaboration’s market share was nearly 0%. [ECF No. 661-1, pp. 9-10; Ex. 26, pp. 66-67].

The relevant product markets include development and manufacturing services for certain products that were excluded from the Collaboration. [ECF No. 889, p. 10; Ex. 1, § 1.8]. The geographic relevant markets are narrower because they only cover the U.S. [Ex. 1, §.§ 1.9, 1.22]. Like the Collaboration, the relevant markets exclude “proprietary products.” [Ex. 38, ¶¶ 105, 140, 144]. “Proprietary products” are a. party’s “own products” [Id.] meaning drugs “whose formulation is owned exclusively by an individual or business.”

Post-Complaint:

After 'the acquisition closed, Patheon continued to offer manufacturing opportunities to Procaps, but Procaps rejected them. [ECF No. 565, p. 10].

Patheon appointed David Hamby (“Hamby”), its vice president of business services, to serve as the “Gatekeeper” who was charged with the responsibility to implement the Agreement’s market allocation requirements. [ECF No. 521, ¶ 37]. Ham-by would evaluate • each opportunity as it came in and determine whether it went to the Collaboration or to Patheon/Banner. If the opportunity was within the Collaboration, “it went to Procaps.” [Id.].

According to Procaps, the Banner acquisition .put. it in an untenable position. Pro-caps refused to participate in the allocation procedure and told Gatekeeper . Hamby that it believed doing so would violate the antitrust laws. Procaps informed Patheon that it was not terminating the Agreement, but it demanded that Patheon fix the problem its acquisition of Banner had created. [ECF No. 519-1, ¶ 16]. Under the Agreement, Patheon had six months to either to divest Banner or bring the newly-acquired Banner assets lawfully into the Collaboration; [Ex. 1 § 10.4(b)]. It did neither. [ECF No. 519-1, ¶¶ 14, 17; Ex. 85 at 163]. Instead, at the end of the cure period, in July 2013, Patheon terminated the Agreement, thereby ending the Collaboration and its P-Gels offering.

Procaps contends that Patheon’s acquisition of Banner, coupled with the Agree-merit’s exclusive manufacturing provision that allocated markets and customers to Procaps, deprived customers in the. relevant markets of the ability to use Pa-theon/Banner, because the Banner assets were required to be withdrawn, [Ex. 104 at 9-16], Procaps also alleges that Patheon’s Banner acquisition also deprived customers of the ability to purchase P-Gels since Procaps would not accept business opportunities, it believed were being allocated to it in violation .of the antitrust laws. [Id. at 16-22].’

For purposes of this case, the relevant geographic market is the United States and the relevant product markets are (1) contract development and manufacturing of prescription softgels for sale in the U.S., and (2) contract development and manufacturing of non-prescription softgels for sale in the U.S. by the ten buyers specified in an amendment to the parties’ Collaboration Agreement. [ECF No. 565 at 37; Ex. 104 at 31]. ' '

Concerning its own alleged injury, Procaps contended, in its Response to Patheon’s New Interrogatories and its Revised Responses to those same interrogatories [ECF Nos. 661-1, p. 11; 811-5, p. 13] that it was “foreclosed from the relevant markets”- after “Patheon’s acquisition of Banner” and that “Procaps was substantially foreclosed - from competing in the Markets as of Décember' 12, 201[2].” After. Patheon learned that Pro-caps was still competing (at least to an extent) in the relevant markets, Procaps took the position, in its opposition [ECF No. 931, pp. 34-35] to Patheon’s second summary judgment motion, that “complete exclusion is not -required” and that it was “effectively shut out” of the relevant markets.”

Procaps’ Efforts to Demonstrate Relevant Factual Disputes

Procaps’ opposition [ECF No. 931] to Patheon’s second summary judgment motion includes arguments challenging Pa-theon’s claim that no relevant factual disputes exist to preclude summary judgment. The Court, will outline the parties’ positions concerning the significant purported disputes (and will reference the specific numbered paragraph number):

Paragraph 2. Patheon contends that the Collaboration did pot go well, but Procaps disputes this description (even though its own expert, Blair, explained in deposition testimony that it was “not, very successful”). From the Undersigned’s perspective, it is not particularly significant whether an expert or a fact witness used one adjective or a different adjective to portray the results of the Collaboration. Instead, the actual facts and the actual results are what matter. There is no dispute that the parties won only two contracts totaling approximately $123,000.00 in revenue in one year.

Paragraph 3. Patheon notes that Pro-caps initially recognized the potential efficiencies in the Collaboration resulting from the Banner acquisition. Procaps does not exactly dispute that its executives discussed -competition-enhancing opportunities arising from a Banner acquisition into the collaboration; But its opposition memorandum says, in the title of a paragraph-by-paragraph review, that this particular paragraph (i.e., Patheon’s numbered paragraph 3 in its statement of undisputed facts) is '“disputed.” The Undersigned does not agree. The salient point here is that Procaps initially analyzed the.news about the Banrier acquisition, at least in part, in a favorable light, including the notion that “access” to Banner’s technologies, would be “certainly a gain for [Procaps].”

Paragraph 5. Procaps does not dispute that Banner had only a 6% market share in the relevant markets. It contends that market share is “irrelevant to this case but it- also contends that Patheon “expected” Banner to have a 20-25% shai*e in softgel prescription market by 2015. [EOF No. 931, p. 6]. ‘ '

Paragraphs 7 and 8. Procaps disputes Patheon’s representation, as an undisputed fact, that Procaps’ efforts to compete in the relevant markets following Patheon’s acquisition of Banner involved six projects which will generate at least' .$2 million. Procaps does not challenge its involvement in the' six projects, but it conteiids that they are outside the relevant markets; Procaps concedes that it has or shortly will generate $306,000.00 in revenues from non-excluded business opportunities in the relevant markets since Patheon terminated the Agreement in 2013.

Patheon - contends that this $306,000.00 in revenue is sufficient to generate grounds to grant its summary judgment motion because it shows Procaps was not “completely foreclosed” from participating in the relevant markets. Procaps challenges the “completely foreclosed” legal theory and the Undersigned will address this dispute over the applicable law láter, in the legal analysis section on antitrust injury. For now, the discussion concerns the so-called factual dispute over the contracts (above and' beyond the $306,000.00 which Procaps admits) and whether they are in the relevant markets.'

Paragraph 9. Patheon contends that it did not remove the Banner assets from the relevant markets. It agrees that it allocated the Banner assets initially by first offering opportunities arising after the Banner acquisition closed to Procaps, but it -suggests that it later analyzed the opportunities on .a. case by case basis “and used its business judgment to pursue the ones that made business sense.” To support this purported undisputed fact, Pa-theon relies on the declaration of Gatekeeper Hamby. But. Procaps argues that Hamby’s declaration is conclusory and contradicts his prior testimony. In addition, Procaps emphasizes that (1) Hamby did not identify- any specific opportunity which Patheon then supposedly pursued and (2) Patheon did not in discovery identify any target customer for a proposal after Pro-caps rejected the opportunity.

The Court is unable to conclusively determine that there is no factual dispute concerning the removal of the Banner assets, and it will conduct the relevant antitrust analysis by acknowledging a factual dispute and by assuming that Procaps’ factual interpretation is actually the correct one — i.e.,. that Patheon did in fact remove the Banner assets from the relevant markets for seven months, until it terminated the Collaboration'Agreement in July 2013. Therefore, Procaps cannot complain.about the existence of a factual dispute because this- Order is based on Procaps’ version of the facts concerning Patheon’s removal of the Banner assets. The Undersigned is inferring that the facts are actually the way Procaps portrays them — that the Banner assets were removed for seven months.

Paragraphs 12 and 13. Procaps disputes Patheon’s contention that Procaps has not demonstrated any actual anticompetitive effects arising from the restraint (i.e., the removal of the Banner assets for seven months). But, as it turns out, this is not actually a factual dispute. Instead, it is merely wrangling over the significance of undisputed facts and which legal standard is used to evaluate those facts (i.e., may Procaps use general economic principles, assumptions and predictions, instead of specific empirical evidence?).

In its Court-ordered Supplemental Response to Patheon’s New Interrogatories [ECF No. 811-5], Procaps advised that it “will establish the element of anticompeti-tive effect’by showing that Patheon’s behavior had an actual, detrimental effect on competition in the relevant markets defined by Patheon’s expert economist and adopted by Procaps.” It also represented that it “will not attempt to establish an interference of a potential for genuine adverse effects on competition based on present or projected market shares of Pa-theon/Banner or the present and projected market shares of any other competitor in the Market.”

In these same interrogatory answers, Procaps represented that it “does not have such an individualized accounting” and therefore could not provide a “customer-by-customer accounting of competitive harm.”

In addition, Procaps further explained that it would prove its case through “well-established economic principles” but “cannot quantify the adverse impact on price or price levels flowing from the restraint^]”

Similarly, in its opposition [ECF No. 931] to Patheon’s summary judgment motion, Procaps “agree[d] that it has not presented an individualized accounting of specific transactions.” Procaps attributes this omission to its argument “that it is not possible to quantify the specific competitive harm on a customer-by-customer basis.” Procaps’ response provided additional clarification of its position: “Moreover, although transaction-specific details do not themselves demonstrate an increase in price, reduction in output, or reduction in quality from the withdrawal of Banner’s assets, those are not the only indicia of competitive harm.” Therefore, Procaps says, “standard economic principles predict that the elimination of a competitor is inherently anticompetive. It leads to higher prices, lower quality, reduced services and reduced innovation.” (emphasis supplied).

These points all mirror the explanation that Procaps provided in a memorandum it filed with the Court in May 2015 [ECF No. 709], when it represented that its anticipated expert testimony would be that the so-called disruption of the proper functioning of the price and output setting mechanism (1) would be “based on well-established economic principles” and (2) “inevitably, predictably and inexorably led to adverse price and output effects as compared to the ‘but for’ world.”

Procaps “does not dispute that it does not have quantitative evidence that any customer paid a measurably higher price for softgels as a result of the market allocation” and agrees that its expert “did not perform an empirical study or state in his report that there was empirically measurable evidence of higher prices, lower quality, poorer service or lower quantities.” Thus, Procaps “does not dispute” that its expert “did not measure the magnitude of anticompetitive effects.”

Therefore, Procaps does not dispute that it lacks empirical evidence. It contends that other types of evidence, such as its expert’s predictions, based on general economic principles, are sufficient. But this dispute — over what type of evidence must be presented by an antitrust plaintiff required to demonstrate actual anticompeti-tive effects — is a legal dispute.

Paragraph 17. Procaps challenges Pa-theon’s view that the Banner acquisition allowed Patheon to implement efficiencies, including efforts to compete more aggressively in the relevant markets. For example, Patheon points to record evidence demonstrating that it reduced the costs of manufacturing softgels at the former Banner facilities, which lowers prices. Procaps’ position — that a factual dispute exists — is that “none of the purported efficiencies flow from the restraint or relate to competition in the relevant markets.”

Patheon says the procompetitive effects or justifications need not arise from the restraint and that the issue is resolved by seeing if the benefit or justification was created after the restraint (i.e., performing an evaluation of the “but for world”). But, similar to its position that there is a factual dispute about actual effects, Procaps’ so-called factual dispute. is actually a legal dispute over which efficiencies can .be considered. In other words, its point (that the efficiencies which Patheon points to do not flow from the restraint) is largely a legal-type argument about whether those efficiencies and justifications may even be considered. Once the correct standard is determined (i.e., that the efficiencies and justifications must relate to the challenged restraint), then, as discussed later, there is a factual dispute about whether there are in fact acceptable justifications for the restraint.

III. The Summary Judgment Standard

The Court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any . material fact and the movant is entitled -to judgment as a matter of law.” Fed. R. Civ. P. 56(a). When “the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (citation omitted)., If .the movant establishes the absence of a genuine issue, the non-movant must,“do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

For issues on which the opposing party will have the burden of proof at trial, the movant can prevail by merely pointing out that there is an absence of evidence to support the non-movant’s case. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Therefore, if Procaps, as the non-moving party, fails to make a sufficient showing on an essential element of its antitrust claim, then summary judgment for Patheon is warranted.

“By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original). “As to materiality, the substantive law will identify which facts' are material. Only disputes'over'facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary, judgment. Factual disputes that are irrelevant or unnecessary will not be counted.” Id. at 248, 106 S.Ct. 2505. Likewise, a dispute about a material fact is a “genuine” issue only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. .

The non-movant cannot defeat summary judgment by: (a) “rest[ing] upon mere allegations or denials”; (b) “simply saying the facts are in dispute”; or (c)' relying on “evidence that is merely colorable or not significantly probative.” Woolsey v. Town of Hillsboro Beach, 541 Fed.Appx. 917, 919 (11th Cir.2013); Latele Television, C.A. v. Telemando Commc’ns Grp., LLC, 2014 WL 7272974, at *7 (S.D.Fla. Dec. 18, 2014); Fields v. Gorman, 2010 WL 3769396, at *3 (S.D.Fla. Sept. 3, 2010). “Rhetoric and attorney argument are no substitute for record evidence.” Latele, 2014 WL 7272974, at *7.

To the contrary, the opposing party has a duty to present affirmative evidence in order to defeat a properly supported summary judgment motion. Anderson, 477 U.S. at 252, 106 S.Ct. 2505. Indeed, “Rule 56 mandates the entry of summary judgment, upon motion, against a party who fails to make a showing sufficient to establish an element essential to his case on which he bears the burden of proof at trial.” Schechter v. Ga. State Univ., 341 Fed.Appx. 560, 562 (11th Cir.2009). A mere “scintilla” of evidence in favor of. the non-moving party, or evidence that is merely colorable or not significantly probative is not enough to defeat a properly supported summary judgment motion. ,M; see also Mayfield v. Patterson Pump Co., 101 F.3d 1371, 1376. (11th Cir.1996) (conclusory allegations and conjecture cannot be the basis for denying summary judgment).

Courts regularly grant summary judgment in antitrust cases, including those concerning alleged horizontal market allocations. Hilton v. Children’s Hosp.-San Diego, No. 02-CV-1080, 2007 WL 935724, at *5-6 (S.D.Cal. Mar. 7, 2007) (granting summary judgment to defendant when plaintiff, a radiologist who was denied certain privileges at a hospital, , failed to demonstrate injury to competition because he failed to provide evidence showing an antitrust injury but instead asked the Court “to speculate about a potential antitrust injury”) (emphasis added), aff'd, 315 Fed. Appx. 607 (9th Cir.2008); In re Online DVD-Rental Antitrust Litig., 779, F.3d 914, 920-22 (9th Cir.2015) (affirming summary judgment, to defendants because online DVD-rental subscribers did not make a sufficient showing that they suffered antitrust injury in fact from promotion agreement); Metro Indus. v. Sammi Corp., 82 F.3d 839, 841-44 (9th Cir.1996) (affirming summary judgment for defendants under rule’ of reason analysis in case alleging horizontal market division “between competitors at the same market level”); Petri v. Va. Bd. of Med., No. 1:13-cv-01486, 2014 WL 6772478 (E.D.Va. Dec. 1, 2014) (granting summary judgment because plaintiff chiropractor did not establish that pricing in' the market was altered or that other chiropractors failed to • join, or left, the market because of the actions by the Virginia Board of Medicine, which allegedly allocated the service markets to medical doctors and to have excluded chiropractors).

IV. Antitrust Principles and Legal Analysis

Rule of Reason & Sliding Scale

Procaps must show an agreement that unreasonably restrains trade and prove that it has suffered an antitrust injury. Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990); Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1455-56 (11th Cir.1991). It must also “prove: ‘(1) an anticompetitive effect of the defendant’s conduct on the relevant market, and (2) that the conduct has no prpcompetitive benefit or justification.’ ” [ECF No. 565, p. 37] (quoting Levine v. Cent. Fla. Med. Affiliates, Inc., 72 F.3d 1538, 1551 (11th Cir.1996)).

The Undersigned previously (in the Order on the earlier summary judgment motions) determined that the rule of reason mode of antitrust analysis. applies to this case. [ECF No. 565].

The Supreme Court provided the classic articulation of the rule of reas'on in Bd. of Trade of City of Chicago v. United States: “[T]he court [or factfinder] must ordinarily consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable.” 246 U.S. 231, 238, 38 S.Ct. 242, 62 L.Ed. 683 (1918). The ultimate question is whether the restraint, in the end, “promotes competition or whether it is such as may suppress or even destroy competition.” Id.

The Supreme Court’s cases over' the past 35 years not only move away from rigid application of the per se rule, but also demonstrate a trend' away from a “full blown” rule of reason in favor of a more-tailored approach of “meet for the case.” See NCAA v. Bd. of Regents, 468 U.S. 85, 109 n. 39 & 110, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984) (rule of reason can sometimes be applied “in the twinkling of an eye” and need not require detailed market analysis); Cal. Dental Ass’n v. FTC, 526 U.S. 756, 781, 119 S.Ct. 1604, 143 L.Ed.2d 935 (1999) (rule of reason is continuum to- be applied in a manner “meet for the case, looking to the circumstances, details, and logic of a restraint”); FTC v. Actavis, Inc., — U.S. ——, 133 S.Ct. 2223, 2237, 186 L.Ed.2d 343-38 (2013) (“there is always something of a sliding scale in appraising reasonableness” and “the quality of proof required should vary with the circumstances”) (emphasis added).-

Although Patheon’s counsel asserted at the summary judgment hearing (and again in its proposed order [ECF No. 992-1]) that the sliding scale does not apply to this case [ECF No. 99Ó, p. 196], the Court disagrees. In its,prior order, this Court quoted several, of the Supreme Court statements cited above [ECF No; 565, pp. 4, 25,.26], and the Court will follow the Supreme Court’s instruction to ascertain the quality of proof required under the particular circumstances. See. generally Polygram Holding, Inc. v. FTC, 416 F.3d 29, 35 (D.C.Cir.2005) (noting that the courts have “backed away from any reliance upon fixed categpries and toward a continuum”).

Therefore, the Court will take the circumstances, details, and logic of the restraint into consideration in deciding the contours of the rule of reason, and . the sufficiency of the evidence. The . sliding scale nature of the rule of reason.requires as much. See also Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 49, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977) (under the rule of reason, “the factfinder weighs all of the circumstances of a case in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition”).

But the use of a sliding scale approach does not mean that the Court will ignore applicable law imposing substantive requirements for the type of claim Procaps has opted to pursue.

Citing Jacobs v. Tempur-Pedic, Inc., 626 F.3d 1327, 1334 (11th Cir.2010), Procaps argues [ECF No. 931, p. 2] that “horizontal market division agreements ... virtually always stifle competition.” (emphasis by Procaps in its opposition memorandum). But this suggests that the restraint here should be condemned under a per se rule, as opposed to being assessed under a sliding scale rule of reason methodology. The Court has previously determined that the rule of reason would be used, and recent United States Supreme Court cases confirm the wisdom of a flexible, case-specific approach. See, e.g., Actavis, 133 S.Ct. at 2235-36 (market allocation judged under the rule of reason); Texaco, Inc. v. Dagher, 547 U.S. 1, 4-8, 126 S.Ct. 1276, 164 L.Ed.2d 1 (2006) (price setting by two oil companies operating in a joint venture evaluated under the rule of reason).

Actual Detrimental Effects

There are two ways to prove an “anticompetitive effect”: (1) “an actual detrimental effect” (“Prong 1”); or (2) “the potential for genuine adverse effects” (“Prong 2”). Levine, 72 F.3d at 1541-42. To prove Prong 2, plaintiff must prove market power and link it to competitive harm in the market. Jacobs, 626 F.3d at 1338-40.

Patheon argues that Procaps cannot establish market power because the total market share (of Banner) is at most 6%. Retina Assocs., P.A. v. S. Baptist Hosp. of Fla., Inc., 105 F.3d 1376, 1384 (11th Cir.1997) (“fifteen percent ... [is] insufficient, as a matter of law, to establish market power” in a horizontal market restraint case); Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210, 229 (D.C.Cir.1986) (“Atlas has 6% or less of the relevant market, far too little to make even conceivable an adverse effect upon output”). But regardless of whether Pro-caps could establish market power, the significant point is that it is undoubtedly proceeding under Prong 1 [ECF No. 710], which requires that it prove actual detrimental effects — and that market power is not part of its direct case. In fact, Procaps represented in writing to the Court that it was bound by its decision to proceed solely under a Prong 1 actual effects methodology.

Proving Detrimental Effects: What Type of Evidence is Required?

The parties disagree about the type of proof which Procaps must submit in order to demonstrate the actual detrimental effects required by Prong 1 of the Levine standard. Basically, Procaps contends that well-established economic principles about markets and how they function are adequate. Patheon disputes this, arguing that empirical data is required, not assumptions and not predictions.

In an earlier Order [ECF No. 710] denying Patheon’s motion [ECF No. 710] for an Order requiring Procaps to show cause why it has not complied with an Order that it file a -formal binding notice on how it intends to prove anticompetitive effects, the Court noted that Procaps’ position “may be fatal or significantly damaging to its case.” The Order further, pointed out that Procaps “might not be able to sustain its burden to prove anticompetitive, effects” using its approach and that “[tjime (and the inevitable further legal briefing) will tell.”

Time has now passed, and it must be determined, as a matter of law, whether Procaps may establish actual detrimental effects through principles and theories and assumptions,-rather than with.actual empirical data of specific injury to. competition in the applicable geographic and product market.

Patheon contends that Procaps must present evidence of “‘specific damage done’to consumers’ in the market” such as an actual “reduction of output, increase in price, or deterioration in quality.” Jacobs, 626 F.3d at 1339 (quoting Spanish Broad. Sys. Of Fla., Inc. v. Clear Channel Commc’ns, Inc., 376 F.3d 1065, 1072 (11th Cir.2004); Levine, 72 F.3d at 1551-52). According to Patheon, the actual adverse effect must have actually happened (e.g., output or quality went down, or price went up). Jacobs, 626 F.3d at 1339 (dismissing case for failure to allege actual adverse effect where plaintiff never established that the restraint “artificially raised priefes”); Levine, 72 F.3d at 1551-52 (granting summary judgment where no actual adverse effects existed, because plaintiff failed to show restraint led to “rising fees”).

According to Patheon, predictions based “on general economic theory” or “academic suppositions” on what could or would happen are not evidence of actual adverse effects. Mil. Servs. Realty, Inc. v. Realty Consultants of Va., Ltd., 823 F.2d 829, 832 (4th Cir.1987) (granting summary judgment where expert “based his conclusion on general economic theory and did not conduct any ... studies ... to determine the actual effect the appellees had on competition”); R.C. Dick Geothermal Corp. v. Thermogenics, Inc., 619 F.Supp. 441, 460-61 (N.D.Cal.1985) (rejecting Section 1 claim of actual effects where plaintiff relied on “academic suppositions” and “a theoretical hypothesis” and “provided no evidence ... to support this theory of price effect”), aff'd, 890 F.2d 139 (9th Cir.1989); Tops Mkts., Inc. v. Quality Mkts., Inc., 142 F.3d 90, 96 (2d Cir.1998) (evidence of “potentially higher prices” without proof that “prices were actually higher” insufficient to show an actual harm); Roy B. Taylor Sales, Inc. v. Hollymatic Corp., 28 F.3d 1379, 1385 (5th Cir.1994) (“speculation about anticompetitive effects is not enough.”).

Thus, Patheon concludes, actual detrimental effects cannot-be proved with evidence of “inherent! ]” effects. Spanish Broad., 376 F.3d at 1072-73.

Under Patheon’s view of the applicable law, to prove actual detrimental effects (i.e., “specific damage” to consumers), there must be “sufficient ‘empirical demonstration concerning the [adverse] effect of the [defendants’] arrangement on price or quality.’” K.M.B. Warehouse Distribs. v. Walker Mfg. Co., (“KMB”), 61 F.3d 123, 128 (2d Cir.1995) (brackets in original) (affirming summary judgment) (quoting Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 30 & n. 49, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984)). When a plaintiff fails to empirically demonstrate the alleged decrease- in output, increase in price, or decrease in quality, Patheon emphasizes, courts grant summary judgment for defendant.

Patheon relies on Levine, where a doctor brought a Section 1 claim against defendants based on a suspension of privileges at a hospital and denial of membership in a preferred provider organization. 72 F.3d at 1544. In that case, the Eleventh Circuit affirmed the summary judgment ruling in defendant’s favor, concluding there was no genuine issue of material fact about plaintiff failing to establish “actual detrimental effects.” Id, at 1551-52. The alleged actual detrimental effect .was “rising fees” .for various medical" products and services. Id. at 1546, 1551-52. Plaintiffs “evidence” of those fees was defendant’s Master Payor Rate Schedules, which were hot sufficient to show an actual effect because they were not the fees actually “charged” in transactions. Id. at 1551-52 (emphasis added). So, Patheon notes about the facts in Levine, because the necessary data was lacking, “the actual fees cannot be calculated.” Id. Thus, plaintiff failed to show that “provider fees have risen” so there were no actual adverse effects as a matter of law. Id.

Patheon also relies on Jacobs, where this Circuit affirmed a motion by dismiss an actual effects claim because, the complaint failed to “establish ] the competitive level above which [defendant’s] allegedly anticompetitive conduct artificially raised prices.” 626 F.3d at 1339. In addition, Pa-theon points to the remand decision in California Dental, where the Ninth Circuit found no anticompetitive effect where plaintiff did not show “relevant data from the precise market at issue.” 224 F.3d 942, 957 (9th Cir.2000).

Patheon’s view of the remand in California Dental is supported by Viazis v. Am. Ass’n of Orthodontists, 314 F.3d 758, 766 (5th Cir.2002) (“The [Ninth Circuit on remand] noted that the Federal Trade Commission had failed to-prove actual harm by presenting relevant data from the precise market at issue.”). After evaluating plaintiffs “empirical evidence,” the Court ruled that plaintiff failed to show an anticompeti-tive effect because it had “never quantified any increase in price or reduction in output of dental services resulting from” the restraint. Cal. Dental, 224 F.3d at 957 (emphasis added).

On the other hand, Procaps cites FTC v. Indiana Federation of Dentists, 476 U.S. 447, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986), for the proposition that, to prove aetual adverse effects,' it does not have to show “measurable evidence of price increase” but, instead, needs to show only that the ‘ restraint was “likely enough to disrupt”’the “price setting mechanism of the market[.]” [ECF No. 931, pp. 19-20].

Regardless of the Supreme Court’s use of “likely enough,” courts evaluating a plaintiffs Prong 1 case in the 30 years since IFD do not seem to overtly hold that predictive-type .evidence (i.e., a result is “likely” to occur) is permissible and could be sufficient proof, nor do they unequivocally and expressly mandate “empirical” or “quantitative” evidence. Instead, they typically tend to discuss the actual facts and the types of evidence and then conclude whether the actual evidence is sufficient (though they sometimes explain why evidence is lacking, such as a plaintiff’s undue reliance on predictions).

Patheon contends that IFD is distinguishable, and it urges the Court to not be swayed by the Supreme Court’s use of the phrase “common sense and economic theory” (and to not interpret the language as a signal that empirical evidence is not required).

In IFD, there were specific transactions where dentists submitted claim forms to insurance companies to get reimbursement for dental services on behalf of insured patients. 476 U.S. at 449-51, 106 S.Ct. 2009. A group of dentists formed a federation that issued- a rule forbidding its members from submitting patient x-rays with claim forms. Id. at 451,106 S.Ct. 2009. The federation’s actions led to almost a complete reduction of the output of x-rays by a “heavy majority]” of dentists “over a period of years,” such that insurers were “actually unable to obtain compliance with their requests for submission of x-rays.” Id. at 460,-106 S.Ct. 2009. The FTC found the rule to be an unreasonable restraint and the federation sought judicial review.

The Supreme Court . addressed two modes of analysis under the rule of reason. Its primary holding “formed the basis for what has come to be called the abbreviated or ‘quick-look’ analysis under the rule of reason.” Cal. Dental, 526 U.S. at 769-70, 119 S.Ct. 1604. The FTC had “reasonably relied” on “common sénse and economic theory” to satisfy its burden under the quick look form of analysis by showing the restraint was “likely enough to disrupt the proper functioning of the price-setting mechanism'of the market[.]” IFD, 476 U.S. at 456, 461-62, 106 S.Ct. 2009 (citing Nat’l Soc’y of Prof'l Eng’rs v. United States, 435 U.S. 679, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978)). Indeed, in its proposed order on its own motion for partial summary judgment, Procaps itself relied on IFD as an example’of the “quick look analysis.” [ECF No. 506-1, p. 8].

IFD contained a four-sentence alternative holding that, “even if’ the restraint was not “naked,” and the “quick-look” did not apply, plaintiff would still have prevailed under a non-truncated rule of reason approach because it proved an “actual detrimental effect.” Id. at 460-61, 106 S.Ct. 2009; see also Realcomp II, Ltd. v. FTC, 635 F.3d 815, 828 (6th Cir.2011) (“Although the policy at issue in Indiana Federation was initially afforded abbreviated treatment, the Supreme Court also analyzed the restriction as if it were not sufficiently ‘naked.’ ”) (emphasis added).

The “actual detrimental effect” was the actual, almost 100% reduction in the output of x-rays, as insurers were “actually unable to obtain” the x-rays they sought from the dentists as part of the transactions to reimburse dentists for their services to insured patients. IFD, 476 U.S. at 460, 106 S.Ct. 2009; see Reazin v. Blue Cross and Blue Shield of Kansas, Inc., 899 F.2d 951, 968 & n. 24 (10th Cir.1990) (the “Court agreed that ample evidence supported the finding that actual detrimental effects had been proven, because ‘in two localities ... Federation dentists constituted heavy majorities of the practicing dentists and ... as a result of the efforts of the Federation, insurers in those areas were, over a period of years, actually unable to obtain compliance with their requests for submission of x rays.’ ”); Viazis, 182 F.Supp.2d at 573 (IFD “viewed the factual record as facially showing ... output in the relevant market actually being reduced”); First Data Merch. Servs. Corp. v. Securitymetrics, Inc., No. RDB-12-2568, 2015 WL 5734413, at *10 n. 21, 2015 U.S. Dist. LEXIS 126490, at *32-34 & n. 21 (D.Md. Sept. 22, 2015) (IFD was “a case involving reduced output”); ABA, Antitrust Law Developments 69 (7th ed. 2012) (“The Court viewed [the restraint] as an actual reduction in output”).

Patheon contends that the Court’s references to “common sense and economic theory” — and its holding that the restraint is “likely enough” to disrupt the market— applied only to its quick-look analysis, and other cases support this view. Cal. Dental, 526 U.S. at 770, 119 S.Ct. 1604 (the conduct IFD deemed “likely enough” to harm competition was condemned under a quick look analysis); Realcomp, 635 F.3d at 827-28 (in a non-truncated case, merely showing that a restraint is “likely enough to disrupt the ... price-setting mechanism” is not enough to prove an actual detrimental effect); United States v. Brown Univ., 5 F.3d 658, 673 (3d Cir.1993) (citing IFD’s “likely enough” language to support quick look analysis). This language was not in the four-sentence alternative holding on actual detrimental effects, and it does not describe the evidence necessary to prove actual adverse effects in a non-truncated case. This lawsuit, of course, is now a non-truncated case, proceeding under a rule of reason approach.

IFD demonstrates how market power (typically reserved for Prong 2 case analysis) can impact what must be shown in an actual effects (Prong 1) case. The IFD Court focused on market power and the fact that the federation consisted of 100% and 67% of the marketplace in two specific locales. As the court in Viazis noted, “the Supreme Court viewed the factual record as facially showing the Indiana dentists with market power, output in the relevant market actually being reduced, and costs likely having been increased. In other words, it was obvious that when almost 100% of the dentists were engaged in the effort to prevent insurance companies from receiving the cost analysis x-rays they had specifically desired, output and price in the relevant market were impacted.” 182 F.Supp.2d 552, 573 (E.D.Tex.2001) (emphasis added).

In essence, because of the sheer strength of the defendant’s market power, the IFD Court could give a “quick look” to the situation and deem it an “obvious” anticompetitive effect, because no matter the restraint, when an organization controls 100% or 67% of a market, that restraint will effect output in that market by sheer market presence alone. No such obvious results are present here, however, and Procaps has, not demonstrated that market power is sufficient to trigger a quick look approach.

Based on the Undersigned’s review of the applicable law and a careful reading of IFD, there appears to be significant'support for the view that thfe actual detrimental effect must be a result which has in fact already happened, as opposed to a result which is speculative, hypothetical, likely, inherent or one having potential to create damage. See Coca-Cola Co. v. Omni Pac. Co., Inc., No. 3:98-cv-0784, 2000 WL 33194867, at *6-8, (despite expert testimony “that [defendants’] policy has had an adverse impact upon competition,” the court granted summary judgment because plaintiff still “failed to introduce sufficient evidence to create an issue of material fact that TCCC’s policy has had a substantial impact on the relevant market.”). See also Mil. Seros. Realty, Inc., 823 F.2d at' 832 (the court granted summary judgment for defendant where the expert “based his conclusion on general economic theory and did not conduct any ... studies ... to determine the actual effect the appellees had on competition,” which meant that plaintiff did not meet its burden because the expert’s “affidavit does not contain any factual predicate for its theoretical conclusion”).

In fact, the cases cited by Patheon are a powerful indication that predictions and general theories are insufficient. For example, in Roy B. Taylor. Sales, Inc., the Fifth Circuit referred to Jefferson Parish, noting that “[speculation about anticom-petitive effects is not enough. Taylor had to show that the tie ‘as it actually operated[d] in the market’ harmed competition.” 28 F.3d 1379, 1385 (emphasis added) (citing Jefferson Parish, 466 U.S. at 30, 104 S.Ct. 1551). Likewise, in KMB, the Court held that to prove actual detrimental éf-fects (i.e., “specific damage” to consumers), there must be “sufficient ‘empirical demonstration concerning the [adverse] effect of the [defendants’] arrangement on price or quality.’” 61 F.3d at 128 (brackets in original but emphasis supplied) (affirming summary judgment) (quoting Jefferson Parish, 466 U.S. at 30 & n. 49, 104 S.Ct. 1551).

To provide yet another illustration, the plaintiff in Flegel v. Christian Hosp., Ne