Full opinion text
OPINION DEBEVOISE, District Judge. Plaintiff Glictronix Corporation filed this action against the American Telephone and Telegraph Company and its other affiliated defendants alleging violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2. Now pending are plaintiff’s motions (1) for class certification and (2) for partial summary judgment to preclude relitigation of issues decided adversely to AT & T in Litton Systems, Inc. v. American Tel. & Tel. Co., 76 Civ. 2512 (S.D.N.Y.1981), aff’d, 700 F.2d 785 (2d Cir.1983), cert, denied, — U.S. —, 104 S.Ct. 984, 79 L.Ed.2d 220 (1984). Facts Plaintiff, Glictronix Corporation (“Glictronix”) a retailer of telephone terminal equipment, alleges that the defendants (hereinafter collectively referred to as “AT & T”) engaged in a course of anticompetitive and predatory conduct with respect to the distribution, sale, rental and/or lease of telephone terminal equipment in the geographic markets serviced by the two defendant operating companies, New Jersey Bell Telephone Company and New York Telephone Company. Glictronix alleges that defendants’ acts constitute monopolization, attempt to monopolize and conspiracy to monopolize, all in violation of Section 2 of the Sherman Act and a conspiracy to restrain trade in violation of Section 1 of the Sherman Act. The products at issue in this case are two types of telephone terminal equipment: private branch exchange telephone systems (“PBXs”) and key telephone systems (“key systems”). A PBX is used for transmitting and receiving telephone calls and switching such calls to a number of connected individual telephones. A key telephone system is used to connect a single telephone station to telephone trunk lines by manipulation of buttons on the face of the telephone. Reference to the history of AT & T’s control over the telephone terminal equipment market is necessary to an understanding of Glictronix’s claims. Until 1968, AT & T held an absolute, governmentally recognized monopoly over terminal equipment. It issued tariffs which were filed with the Federal Communications Commission (“FCC”), prohibiting telephone customers from installing any such equipment not obtained from AT & T. In 1968, the FCC ruled that these tariffs were unlawful. In the Matter of Use of the Carterfone Device in Message Toll Telephone Service, 13 F.C.C.2d 420, recon. denied, 14 F.C.C.2d 571 (1968). Following this decision, AT & T imposed new tariffs which required that telephone customers who obtained terminal equipment from AT & T’s competitors use an “interface device” or “protective connecting arrangement” (“PCA”), to be interposed as a barrier between the AT & T network and the non-AT & T equipment. The PCA had to be leased from and installed by AT & T. The ostensible purpose of the PCA was to protect the network from non-AT & T equipment which might damage it. The PCA tariff was chosen by AT & T over an alternative method of ensuring protection of the network, namely the development of a system of certification standards. A certification or registration system would regulate the type of equipment which could be connected to the network, and ensure that potentially harmful equipment would not be connected to the network, at least not without protective circuitry. When AT & T filed the PCA tariff in 1968, the FCC permitted enforcement of the tariff without either approving or disapproving it. Carterfone, supra, 14 F.C.C.2d 571 (1968). However, in November, 1975, the FCC generally rejected the PCA tariff in favor of a certification system. Proposals for New or Revised Classes of Interstate and Foreign Message Toll Telephone Services (MTS) and Wide Area Telephone Service (WATS), 56 F.C.C.2d 593 (1975). Although excluded from this ruling in 1975, the equipment at issue in this case was later included in the certification program. Interstate and Foreign Toll Telephone Service, 58 F.C.C.2d 736 (1976); Interstate and Foreign MTS and WATS, 67 F.C.C.2d 1255 (1978). The FCC’s 1975 ruling stated in unequivocal terms that the PCA tariff provisions “impose[d] an unnecessarily restrictive limitation” and “constitute[d] an unjust and unreasonable discrimination both among users.... and among suppliers of terminal equipment.” After cataloging the extensive reports, recommendations and other material the FCC had considered, the filing also concluded that “there has been no demonstration of network harm resulting from the interconnected operation of some 1600 independent local telephone companies and the Bell System ... many of whom purchase and connect without benefit of carrier-supplied connecting arrangements the identical independently manufactured terminal equipment for which the individual user must lease carrier-supplied connecting arrangements.” Proposals for New or Revised Classes of Interstate and Foreign Message Toll Telephone Service (MTS) and Wide Area Telephone Service (WATS), 56 F.C.C.2d 593, 598 (1975) (first Report & Order). In affirming the FCC’s extension of a certification system to PBXs and key systems which had their own protective circuitry, the Fourth Circuit termed the PCA requirement an attempt to preserve “the carriers’ private lawmaking authority over independent manufacturers.” North Carolina Utilities Commission v. F.C.C., 552 F.2d 1036, 1051 (4th Cir.), cert. denied, 434 U.S. 874, 98 S.Ct. 222, 54 L.Ed.2d 154 (1977). Even after these decisions, PCAs are still required for equipment that does not meet FCC registration standards and for equipment which is not properly installed. Interstate and Foreign MTS and WATS, supra, 67 F.C.C.2d at 1256, 1272 n. 21. Glictronix alleges that AT & T violated § 2 of the Sherman Act, by adopting the PCA tariff and opposing the adoption of certification standards. It alleges that AT & T’s imposition of the PCA tariff was unlawful in light of the alleged facts that: 1. the PCA was unnecessary to protect the network from harm; 2. the direct cost of the PCA created an artificial economic barrier to competition in the terminal equipment market; and 3. the tariff was adopted and pressed on the FCC as a delaying tactic, designed to suppress competition in the terminal equipment market until AT & T developed products which could compete effectively in that market. Glictronix also alleges that AT & T: disparaged the telephone terminal equipment distributed by their competitors (Complaint ¶ 33(a)); prematurely announced to telephone customers the availability of new terminal equipment in order to persuade such customers not to purchase competitive equipment (id. at ¶ 33(b)); delayed installation of and improperly installed and maintained PCAs required to interconnect the equipment distributed by plaintiff and other class members (id. at ¶ 33(d)); engaged in the practice of reciprocal trading, whereby defendants would purchase goods and services upon the condition that the supplier of such goods and services would obtain its telephone equipment from defendants (id. at ¶ 33(g)); “refuse[d] to sell inside wiring at all, refuse[d] to sell the inside wiring at a reasonable price, refuse[d] to negotiate the sale of inside wiring in good faith, refuse[d] to make timely responses to purchase requests and otherwise sabotage[d] inside wiring obtained by plaintiffs” (Plfs. Brief at 26); and “subjected competitors to unfair and expensive cutover tactics by failing to acknowledge or claiming non-receipt of customer cutover instruction letters; by continuously changing cutover dates; by delivering the wrong Bell trunk line or tie line equipment; by refusing to remove defendants’ equipment or lines; by insisting incorrectly that customer difficulties were due to the customer equip-, ment; by installation personnel leaving a job site unfinished; by their destruction of cable on the customer’s premises; and by improperly making the cutover to competitor’s equipment” (Plfs. Brief at 27-28). AT & T contends that the equipment included under the headings of PBXs and key systems is diverse. It claims that the design and functions of PBXs vary greatly, with different variations handling from fewer than 30 to thousands of telephone lines. During the relevant period, PBXs could operate through “radically different technologies.” The generic term “key telephone system” also encompasses a wide variety of equipment having varying capacities and using varying technologies. Glictronix marketed only a few of the many PBX and key systems in existence during the relevant period. (Glick Dep. at 91-93). Glictronix concentrated its sales efforts on customers seeking equipment for fewer than 200 lines (Id. at 96). AT & T asserts that these different makes and models of PBXs and key systems possessed different potentials for causing harm to the AT & T network. As noted by AT & T, even when the FCC permitted direct connection of PBXs and key systems to the network in 1978, it ruled that PCAs would continue to be required for equipment that did not conform to registration standards, 67 F.C.C.2d 1255, 1272 n. 21 (1978). One difference among various makes and models of PBXs and key systems found significant by the FCC in its registration orders was the ability of the power supply transformer to prevent power surges from passing through the equipment into the network. According to AT & T, some, but not all manufacturers of terminal equipment, used power supplies listed by Underwriters Laboratories as safe for use with commercial power supplies. AT & T implies that the equipment manufactured by some of the class members would not meet FCC registration requirements, and that, despite the advent of registration standards, these manufacturers would still be required to use a PCA. AT & T asserts that these manufacturers cannot show they were damaged by AT & T’s maintenance of the PCA requirement. In addition, the FCC ruled that PBXs and key systems without protective circuitry — even ones that met registration standards — could not be considered harmless until the specific installation of the equipment at the customer’s premised was inspected and certified, 67 F.C.C.2d 1255. For example, because telephone lines within a PBX or key system can come into contact with commercial, power lines, causing hazardous voltages on the network, the FCC mandated that each non-AT & T installation be certified unless a PCA were used. 67 F.C.C.2d at 1277. AT & T argues that any AT & T competitor whose installation would not pass inspection would require a PCA and cannot maintain that it was injured by AT & T’s PCA tariff. AT & T has offered no evidence that any class member’s equipment has actually failed to meet FCC registration standards and has been required to be used with a PCA. Similarly, AT & T has offered no evidence that any class member’s installations have failed to pass FCC inspection. Nor has Glictronix offered evidence to the contrary. In support of its motion for partial summary judgment, Glictronix relies on the jury findings and the opinion of the Second Circuit in litigation brought by Littons Systems, Inc. against the defendants in this case and other AT & T affiliated companies. Litton Systems, Inc. v. American Tel. & Tel. Co., 76 Civ. 2512 (S.D.N.Y. 1981), affd, 700 F.2d 785 (2d Cir.1983), cert. denied, — U.S. —, 104 S.Ct. 984, 79 L.Ed.2d 220 (1984). In 1976, Litton, a terminal equipment manufacturer filed suit alleging the same antitrust violations as are alleged here. The litigation dealt with the same product categories as are in issue here. In Litton, AT & T stipulated that PBXs and key systems constituted a relevant product market under the antitrust laws. See Litton, supra, 700 F.2d at 791. The extensive nature of the Litton litigation was aptly summarized in Jack Faucett Assoc. v. American Tel. & Tel. Co., 566 F.Supp. 296, 298 (D.C.Dist.Col.1983), rev’d, 744 F.2d 118 (D.C.Cir.1984) another ease in which a plaintiff interconnect company sought to have the Litton findings applied collaterally against AT & T: Trial began in 1980, ran for more than five months, generated 18,000 pages of testimony, and 945 exhibits, and concluded with a jury verdict for Litton in January, 1981, for nearly $92 millions as a competitor and $268,000 as a customer of AT & T which the trial count then trebled..... [O]n February 3, 1983 the U.S. Court of Appeals for the Second Circuit unanimously affirmed. 700 F.2d 785 (2d Cir.1983). Rehearing and rehearing en banc were denied, apparently without a dissenting vote, on March 31, 1983. After the Jack Faucett trial court rendered its decision, the United States Supreme Court denied certiorari in Litton, — U.S. —, 104 S.Ct. 984, 79 L.Ed.2d 220 (1984). Glictronix submits that AT & T should be precluded from relitigating the following issues which were decided in Litton: Relevant Product Market (1) The relevant product market is the sale and lease of telephone terminal equipment consisting of PBX Telephone Systems and Key Telephone Systems. (2) Defendants possessed monopoly power in the relevant market. (3) Defendants had a specific intent to obtain monopoly power in the relevant market. (4) There was a dangerous probability that defendants would obtain monopoly power in the relevant market. Anticompetitive or Predatory Conduct (5) Defendants attempted to obtain and did wilfully maintain their monopoly power in the relevant market through the following anticompetitive or predatory conduct: (a) They filed the tariffs requiring a Protective Connecting Arrangement in bad faith; (b) They opposed certification of telephone terminal equipment in bad faith; (c) They intentionally delayed the provision and installation of Protective Connecting Arrangements; (d) They refused, in bad faith, to sell inside wiring at all or on a reasonable basis; and (e) They delayed, in bad faith, in making cutovers to customer provided telephone terminal equipment. Standing to Sue (6) The class plaintiffs in this case have standing to sue for damages as competitors of defendants in the relevant market. Defenses (7) The Protective Connecting Arrangement was not necessary to protect the telephone network from harm, and any claim that it was necessary is baseless. (8) The Noerr-Pennington doctrine is inapplicable to the anticompetitive or predatory conduct of defendants at issue in this ease. (9) The “sham” exception to the Noerr-Pennington Doctrine is applicable to the anticompetitive or predatory conduct of defendants at issue in this case. The proposed class of plaintiffs is defined as: “all persons who engaged in the business of distributing, selling, renting and/or leasing, PBX Systems, both automatic and otherwise, and key telephone systems, of various manufacturers, to subscribers of telephone service in interstate commerce provided by the defendants, New Jersey Bell Telephone Company and New York Bell Telephone Company, and who sustained damages as a result of defendants’ violations of the antitrust laws.” (Complaint ¶ 5). According to Glictronix, there are approximately 600-800 identifiable members of the proposed class. The class members include companies with a wide variety of sizes, structures and marketing philosophies. Glictronix contends that it can establish many essential elements of its case by evidence common to the class. (See Plaintiff’s Class Certification Brief at 3-5). Among the issues Glictronix believes it can establish by common evidence are the relevant product and geographic markets; AT & T’s monopoly power in those markets; its claims based on AT & T’s promulgation of the PCA requirement and opposition to certification standards; its claims based on alleged anticompetitive practices by AT & T including delay in provision and installation of PCAs, refusal to sell inside wiring at all or on a reasonable basis, delay in interconnection to the AT & T network of competitors’ terminal equipment; the fact of injury to each member of the class; and the appropriate measure of damages as to each member of the class. Glictronix has submitted several reports by experts in support of its motion for class certification. These reports deal exclusively with the effects on the class of the PCA requirement and of the delay in adoption of certification standards. One of these experts, Thomas R. Pratt, concluded that the imposition of the PCA tariff on all AT & T competitors: (a) resulted in a significant competitive disadvantage and loss of profits to each proposed plaintiff-competitor; (b) impeded development of the terminal equipment market and reduced competitive activity in that market, and; (c) imposed major constraints on the profitability of each competitor. Mr. Pratt asserts that the members of the plaintiff class incurred damages in two ways. First, the PCA requirement significantly reduced the volume of sales for AT & T’s competitors since the device added significant costs to using and installing competitors’ equipment. Since the class members could have earned profits on these lost sales, they have all been damaged to the extent of the lost profits. (Pratt Report at 2-3). Second, Pratt claims the class members lost profits because the added cost of the PCA forced them to lower their prices in order to stay competitive with AT & T. The need to price their equipment lower resulted in lower profits for each unit of equipment they did sell. (Id.) Pratt served as an expert for Litton in its case against AT & T and was one of the principal participants in the creation of a damage study presented by Litton. That study concluded: The plaintiffs were all damaged by the interface device because it stifled the development of the market and thereby reduced the level of sales and profits. The device also damaged the plaintiffs by necessitating an additional reduction in selling prices in order to compete, and by increasing selling, installation, and maintenance costs for each sale. The overall effect of the device was equivalent to the imposition of a discriminatory tariff against each of the plaintiffs which resulted in lost sales and profits for each of the plaintiffs. (Pratt Report at 4, Appendix to Plaintiff’s Brief in Support of Class.Cert.) These findings are generally supported by reports submitted by Dr. Les Seplaki, a professor of economics at Rutgers, and by Samuel M. DeLuca, an independent consultant in the telecommunications industry and a former employee of New Jersey Bell. According to Glictronix’s experts, the PCA requirement gave AT & T an opportunity to affect every sale of terminal equipment attempted by competitors. Since non-AT & T equipment could only be connected through a PCA provided and installed by a defendant operating company (Plaintiffs Ex. 23, A-307), AT & T was involved every time a non-AT & T sale was attempted. AT & T activities vis-a-vis competitors in the terminal equipment market are recorded in Competitive Activity Reports, which were compiled on an individual basis for each customer when a Bell operating company was faced with competition for a customer’s terminal equipment business. The information in the Competitive Activity Reports included the number of the customers’ lines, the nature of the terminal equipment, the number of stations, detailed cost comparisons, reasons for the customer’s choice between Bell and the competitor, and a general comments section (See ¶ CC ex. 0, A-1083). In addition, a Computerized Economic Comparison — comparing the costs of Bell and non-Bell proposals — was commonly prepared and distributed to customers. Mr. Pratt’s report presents a methodology for calculating damages and allocating damages among the proposed class members. The Competitive Activity Reports provide much of the curcial information on which the method rests. Glictronix contends that calculation of damages is made manageable by the fact that defendants maintained “quite complete records” of every competitive situation. A formal program of competitive activity reporting was commenced on a nationwide basis by AT & T in 1974 (Gear Dep. at 24-16 to 25-5). But monthly competitive analyses for both New York and New Jersey were compiled throughout the entire period of issue here. According to Glictronix, the periodic analyses of the competitive market provide much of the data necessary to determine the size of the market, the extent of competitive efforts and the amount of the market obtained by competitors. The Pratt damage methodology provides for allocation among the class members on a yearly basis dependent upon their pro rata share of the available market. According to the report, the pro rata share is readily ascertainable from the monthly reports. AT & T’s reports provided information on the most active competitors and a “wins to attempts ratio” allowing comparison of the competitors’ relative effectiveness. Although competitive ranking was done only for the top few companies, both the underlying data and software programming is available to rank the competitive effectiveness of every competitor in the market place. (December 12, 1983 2 Weigman Dep. at 129-25 to 131-16). AT & T officials have admitted that, by and large, “If a vendor made a number of sales, he would appear on the list” (McNamara Dep. at 112-113). The Competitive Activity reports provide the best available source for quantitatively and qualitatively assessing AT & T’s competitors in the terminal equipment market. AT & T also submits expert testimony, in the form of a report by Dr. Almaris Phillips, a professor of public policy and of economics and law at the University of Pennsylvania. Dr. Phillips contends that the conclusion of Mr. Pratt and Dr. Seplaki that each class member lost sales and profits it would have obtained in the absence of the PCA requirement is predicated on two incorrect assumptions: “(1) the assumption that, but for the PCA requirement in the Bell System’s post-Carterfone tariffs, the particular PBX and key telephone systems marketed by each potential class member would have been directly connected to the network without protective circuit; and “(2) the assumption that each potential class member would make more sales and more profit in the increased competitive environment that plaintiff assumes would accompany the earlier advent of registration.” (Appendix to Defendants’ Class Certification Brief, Tab 1, at 8.) Phillips contends that the first assumption is wrong because, even under the present certification standards, some class members’ equipment would have to be used with a protective device either because its design did not meet FCC registration standards or its installation did not pass FCC inspection (Phillips Report at 4-7). Phillips also suggests that for some class members the cost of compliance with FCC design and installation requirements could be more expensive than the use of protective circuitry. He cites an FCC report as evidence of this proposition. 67 F.C.C.2d 1255, 1256, 1275-76 (1978). This suggestion is also made in AT & T’s brief, which states that “one interconnect company complained to the FCC that its competitors were choosing to use PCAs rather than comply with the registration requirements.... Customer Provided Equipment and Connecting Arrangement, 85 F.C.C.2d 868, 883 (1981).” (AT & T’s OC brief, p. 45, note.) Glictronix apparently investigated the circumstances of this FCC decision and discovered that the company in question did not deal with PBXs or key systems and therefore was involved in a different product market. In deposition, Glictronix’s expert Pratt did agree that the FCC’s 1978 registration program did impose costs on interconnect companies, and admitted that he did not know what all the components of those costs were or whether they were more or less than the PCA requirement for particular types of equipment (Pratt Dep. at 91, 98-99). However, Mr. Pratt points out in his reply affidavit, that even if there were costs associated with the registration program, those costs are imposed on all manufacturers of PBX and key systems equipment. In contrast, the PCA cost was imposed on all manufacturers except the defendants (Pratt Reply Affidavit ¶ 7, Supplemental Appendix to Brief in Support of Class Certification, Vol. II, Tab 6). Phillips also takes issue with what he terms Glictronix’s second assumption: that each potential class member would have made more sales and/or more profit absent the PCA requirement. Phillips interprets Pratt and Seplaki to have argued that in the absence of the PCA requirement, the AT & T competitors would have been able to raise their prices and thereby obtain higher profits. Phillips attacks this notion under the general economic principle that competition will tend to reduce prices to the marginal cost of the efficient competitor (Phillips Report at 13). He suggests that: [some] competitors — probably those with better financing, better equipment, expandable sources of supply, better management, and adequate service organization — may have improved their sales, whereas those with higher costs and unattractive products would probably have tendered to suffer reduced sales or complete failure. (Phillips Report at 17-18). Consistent with Phillips’ view was the damage model prepared for the Litton case, which Mr. Pratt participated in creating. That model predicted that there would have been a large shake-out of existing interconnect companies that would have been unable to survive if the FCC had adopted registration standards in 1973 (Id.) Pratt and Seplaki respond to Phillips’ charge in different ways. Pratt states that he believed that plaintiffs lost profits because of lost sales, not because they could have raised prices in the absence of the PCA requirement. (Pratt Reply Affidavit, ¶ 11, Appendix to Brief in Support of Class Certification, Supplemental Vol. II, Tab 6). Seplaki states that lost profits were due not to an inability to make more sales, but due to “the necessity of reducing per-unit profit margins as a result of the PCA requirement.” (Seplaki Reply Affidavit, Id. at Tab 7). Pratt attacks Phillips’ argument for its allegedly erroneous substitution of a “hypothetical world” in which Phillips analyzes what would have happened had registration been adopted in 1973 — for the “real world” in which according to Pratt, all class members lost at least some sales because of the costs added by the PCA requirement. Dr. Seplaki similarly responds that he, Seplaki, “concentratefd] on the impact of the PCA as a factual matter in the real world that existed during the relevant period.” (Seplaki Reply Affidavit, ¶ 10). His conclusion is that because of the cost of the PCA, which was imposed on all non-AT & T competitors, all class members were faced with the choice of either lowering their prices to absorb the cost of the PCA for the customer or losing some sales. (Seplaki Reply Affidavit 11 6). Phillips also assails Pratt's methodology for establishing and allocating damages. He identifies “two serious flaws that render it unworkable and contrary to the interests of many of the potential class members.” (Phillips Report at 19). Phillips first criticizes the model because it “allocate[s] damages among class members based on their actual market share for each year from 1970-1978 in the real world.” (Id.) He contends that strong companies, which might have increased their market share in the absence of the PCA requirement, will be foreclosed from making this showing under Pratt’s model. Similarly, AT & T will be foreclosed from arguing that weaker companies’ share of the market would have shrunk in a freely competitive environment. Second, Phillips contends that the model fails to account for companies which dropped out of the market. Under Pratt’s method these companies would be foreclosed from showing what market share they would have captured if they had not been driven from the market. Similarly, companies which delayed their entry into the market because of AT & T’s conduct would not be permitted to show what market share they would have won had they entered sooner. For these reasons, Phillips believes allocating damages in this case will place class members in conflict with one another and would have to be done on an individualized basis. Nothing in plaintiff’s experts’ reports addresses how Glictronix’s damage claims arising from AT & T’s anticompetitive practices (such as delaying the interconnection of competitors’ equipment to the network) can be proven by evidence common to the class. Conclusions of Law I. Collateral Estoppel Glictronix seeks to preclude AT & T from relitigating numerous issues determined adversely to AT & T by the Litton jury and by the Second Circuit on AT & T’s appeal. The doctrine of collateral estoppel provides that “once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent cases based on a different cause of action involving a party to the prior litigation.” Montana v. U.S., 440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979). Although Glictronix was not a party to the Litton case, all of the defendants here were. Glictronix moves to preclude relitigation of the Litton findings under the non-mutual, offensive application of the collateral estoppel doctrine set forth in Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). Before application of collateral estoppel can be deemed appropriate, the court must find that: 1. the party to be estopped must have been a party or in privity with a party to the prior action; 2. the issues to be estopped must be the same as the issues determined in the prior action; 3. the issues must have been actually litigated and necessary to the prior judgment; and 4. application of collateral estoppel will not be unfair because: (a) the party to be estopped had little incentive to vigorously litigate the first action; (b) the first judgment is inconsistent with other judgments on the issue to be estopped; (c) the second action affords procedural opportunities unavailable in the first action (or, more generally speaking, that the party to be estopped had a full and fair opportunity to litigate its claims in the first action); or (d) application of collateral estopped would not otherwise be unfair to the defendant. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). AT & T contends that collateral estopped should not be applied because many of these criteria cannot be met. A. Conditions Met. Defendant do not contest that several of the prerequisites for the application of collateral estopped have been met. The party against whom collateral estopped is asserted must have been a party or in privity with a party to the prior action. Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 328-29, 91 S.Ct. 1434, 1442-43, 28 L.Ed.2d 788 (1971). The defendants here were all parties to the Litton litigation. Second, there must have been a final judgment on the merits on the issues to be collaterally estopped. Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979). A final judgment on the merits was rendered by the Litton jury. That judgment was affirmed on appeal and defendants exhausted their right of appeal when the United States Supreme Court denied certiorari. Litton Systems, Inc. v. America Tel. & Tel. Co., 76 Civ. 2512 (S.D.N.Y.1981), affd, 700 F.2d 785 (2d Cir.1983), cert, denied, — U.S. —, 104 S.Ct. 984, 79 L.Ed.2d 220 (1984). Third, there is no question that AT & T vigorously litigated the Litton case. Beyond these points, each criterion for application of collateral estopped is contested. B. Same or Different Issues To support application of collateral estoppel, the issues as to which a party seeks preclusion must be “identical” or “in substance the same” as the issues determined in the prior litigation. Montana v. United States, 440 U.S. 147, 155, 99 S.Ct. 970, 974, 59 L.Ed.2d 210 (1979); Blonder-Tongue, supra, 402 U.S. at 323, 91 S.Ct. at 1439. Defendants contend that the issues here are different from those decided in Litton because the equipment at issue is not the same. The terms PBX and key system are generic and encompass a wide variety of equipment. Defendants contend that the Litton judgment is inapplicable to models of PBXs and key systems not at issue in Litton. The different models should be treated differently, the argument goes, because they have widely differing potentials for harming the network. Since the PCA is still required by the FCC for equipment which does not meet registration standards, defendant assert that it is important to distinguish among types of PBXs and key systems. Arguably, some equipment would have been required to use a PCA even if registration standards had been adopted much earlier than they were. In support of their position, defendants rely on a recent decision in Am/Comm Systems, Inc. v. American Tel. & Tel. Co., 101 F.R.D. 317 (E.D.Pa.1984), in which a motion to certify a nationwide class of distributors of telephone terminal equipment was denied. Regarding the question of whether class representatives’ claims satisfied the Fed.R.Civ.P. 23(a)(3) requirement of typicality, the Am/Comm Court held that there had to be a “product-by-product” determination of whether the PCA requirement violated the antitrust laws. Id. at 321. Defendants interpret this holding to mean that a model by model analysis of the PBXs and key systems is required in this case and that application of collateral estoppel is inappropriate regarding any model which was not in issue in Litton. Defendants’ interpretation of Am/Comm in this context is incorrect. The Am/Comm plaintiffs defined the relevant product market to include many products in addition to PBXs and key systems, such as burglar alarms and automatic answering devices. (See Suppl. Appendix, Tab 8, ¶ 4(b)). In fact, in its brief opposing class certification in Am/Comm, AT & T emphasized this difference between that case and Litton: The Litton case was limited to PBXs and Key Telephone Systems (700 F.2d at 801). Thus, Litton did not involve any of the types of equipment that are specifically identified in the Complaint in this case. (See Plaintiff’s Supplemental appendix regarding Class Cert., Vol II Tab 9 at 21). Given these facts, it is evident why the Am/Comm court held that product-byproduct analysis was required; the products at issue were wholely different from the PBXs and key systems at issue in Litton. Here AT & T can only contend that different models of PBXs and key systems are involved. In Litton, PBXs and key systems were treated generically. There was no attempt to limit the case to particular models or manufacturers. The relevant product market was “the sale and lease of PBX’s and key systems”. See Phonetele, Inc. v. American Telephone & Telegraph Co., No. CV-74-3566-MML (C.D.Cal., January 19, 1984). In this case, unlike in Am/Comm, the relevant market is limited to PBXs and key systems. Since the relevant product market in Litton covered all such equipment, the PBXs and key systems at issue here must necessarily have been the subject of the findings in Litton. As AT & T points out, the FCC’s registration orders recognized that different equipment may have different potential for harm to the system. Despite this theoretical possibility, the Second circuit in Litton found as a general matter that “the jury could have reasonably concluded ... that AT & T’s ongoing claim of harm to the system was baseless.” Litton, supra, 700 F.2d at 811. Since this determination appears clearly to address the entire product market, there is no basis to require that a new determination be made regarding the specific equipment in this case. C. Actually Litigated and Necessary In order to apply collateral estoppel, the issues to be precluded must have been “actually litigated and necessary to the outcome of the first action.” Parklane, supra, 439 U.S. at 326, 99 S.Ct. at 649, n. 5. AT & T contends that the Litton jury’s “belated” finding that the filing of the interface device tariff was in bad faith was not necessary to the outcome of Litton and should therefore not be given preclusive effect here. As was discussed by the Second Circuit in Litton, when the Litton jury returned its verdict finding AT & T guilty of monopolization, it had failed to reach unanimity on three matters, including special interrogatory 16(a), which asked whether the filing of the interface tariff was in bad faith. Special interrogatory 16 listed nine alleged practices of the defendants and asked the jury on which of the practices it had based its finding of predatory conduct. The jury answered in the affirmative with respect to three of the listed practices: 16-b, “intentional delay in providing and installing interface devices”; 16-c, “opposing certification in bad faith”; and 16-h, “bad faith refusal to sell inside wiring at all or on a reasonable basis.” The jury reported it was divided regarding 16-a, “filing of the interface device tariff in bad faith” and 16 — i, “bad faith delay in making customers.” After this initial verdict, counsel and the court discussed whether the jury should be asked to deliberate further on the undecided questions. AT & T’s counsel argued against further deliberations saying that the absence of unanimity on 16-a and 16 — i “doesn’t interfere in of itself with the damage award ...” (Plaintiff’s Appendix to CE Brief, A6390). The court expressed the opinion that the damage award could be supported by the answer to 16-c. (Id. at A6394). Over defendant’s objections, the judge instructed the jury to try to answer the questions “if you can possibly agree after discussing the matter again ... to see whether or not you can’t in good conscience adopt [the views of other jurors] as your own”. Litton, supra, 700 F.2d at 804, n. 24. (brackets in original). The jury returned after approximately a half hour’s deliberation, having found against AT & T on all three issues. The jury did not change the amount of damages it had already assessed. Id. at n. 25. AT & T argues that because the answer to Special Interrogatory 16(a) came after the determination of damages, the jury did not reach its verdict in reliance on its finding that the tariffs were filed in bad faith and therefore that finding was not essential to the judgment. AT & T also notes that the Second Circuit has stated that the verdict on the monopoly charge and the damage award could be sustained without the three belated findings. Litton, supra, 700 F.2d at 803. In Phonetele, Inc. v. American Tel. & Tel. Co., supra, the court considered and rejected plaintiffs’ motion for application of collateral estoppel based on the Litton findings. As Glictronix contends, the holding of the Phonetele opinion appears to be that collateral estoppel could not be applied because the product and market at issue were entirely different from the products and market in Litton. The product at issue in Phonetele was the “Phonemaster”, a product against which AT & T did not compete since it had no comparable product. (Slip op. at 7, 8). However, after pointing out this difference in product markets, the Phonetele court considered the significance for collateral estoppel purposes of the belated findings. It stated that: Inasmuch as the Court of Appeals then determined that the initial three findings were adequately supported, 700 F.2d at 814-15, it is clearly arguable that the answer to question 16(a) was not necessary. In view of the potentially broad impact of the issue in this case, the Court concludes that its preclusion here on dubious grounds would not be appropriate. (Slip op. at 9). In Selectron, Inc. v. American Tel. & Tel. Co., 587 F.Supp. 856 (D.Ore.1984), the court concluded that “it is a well recognized rule that an alternative ground upon which a decision is based should be regarded as necessary for purposes of determining whether [a party] is precluded by the principles of res judicata or collateral estoppel from relitigating in a subsequent lawsuit any of those alternative grounds. Winters v. Lavine, 574 F.2d 46, 67 (2d Cir.1978).” Id., at 862-863. The clear majority view is that a judgment is conclusive as to all issues that support all independent grounds on which the judgment may be based. IB J Moore ¶ 0.443[5.-2]; Restatement (Second of Judgments, § 27 comment 0 (1982); Winters v. Lavine, 574 F.2d 46, 66-69 (2d Cir. 1978); Williams v. Ward, 556 F.2d 1143, 154 (2d Cir.1977); but see Halpern v. Schwartz, 426 F.2d 102, 105-08 (2d Cir. 1970); District of Columbus v. C.F. & B., Inc., 442 F.Supp. 251 (D.D.C.1977). In Halpern, a case subsequently limited to its facts by Winters and Williams, the court identified two considerations against giving collateral estoppel effect to all alternative grounds of a judgment. First, the court was concerned that if the jury or court in the prior case were sure of one ground, it might not give rigorous consideration to the other. Second, it suggested that a losing litigant might not vigorously appeal an erroneous ruling on one alternative ground if it believed the judgment would be affirmed on another ground. Halpern v. Schwartz, supra, 426 F.2d at 105. AT & T implies that because the jury had already found liability, it may not have given rigorous consideration to interrogatory 16-a. The speed with which the jury decided the question and the fact that the damage award remained unchanged allegedly support this conclusion. In appealing the jury verdict, AT & T argued that the 16-a finding should have been set aside because it had been coerced or was otherwise tainted. The Second Circuit rejected this contention, pointing to evidence that the jury had deliberated conscientiously and had been impartial. Litton, supra, 700 F.2d at 803. Specifically, the court believed the jury was not unfairly disposed to make findings favorable to one side or the other since it had found liability on one count, no liability on two others, and reached no agreement on another. The court ruled that “Litton was entitled to a jury determination on all its claims.” Id. at 804. Apparently the Second Circuit, which had the opportunity to review the entire record, found that there was no reason to believe that the jury had not given fair consideration to interrogatory 16-a. There is no reason to think that the jury’s belated findings were coerced or tainted. The fact that the jury added no damages after answering 16-a does not undermine the necessity of the finding or suggest that the jury did not consider it rigorously. The jury had already found AT & T had opposed certification in bad faith. It is entirely plausible that the jury believed that the finding of bad faith in filing the tariff did not cause damages additional to those caused by the bad faith opposition to certification. Finally, it is mere speculation to conclude that the speed of the jury’s decision indicated that it did not give due consideration to the interrogatory. Having observed the lengthy trial and having previously deliberated their verdict, the jury may well have been able take the needed steps to reach its decision in half an hour with due consideration of the issue. The second Halpern consideration is inapplicable to this case. Not only did AT & T have sufficient motive to appeal the jury’s belated findings, but it did appeal them. It is obvious from the Second Circuit’s opinion that AT & T vigorously challenged the findings and that the court thoroughly considered its arguments. Litton, supra, 700 F.2d at 802-04, 810-12. It is unquestionably true that the jury verdict could have stood absent the interrogatory 16-a findings. But under the prevailing view, the existence of multiple independent grounds for a judgment does not justify the conclusion that any of those grounds are unnecessary for collateral estoppel purposes. This case does not fit into the Halpern exception, even if the Third Circuit recognizes that exception. For these reasons, I conclude that the belated jury findings are to be deemed “necessary” for collateral estoppel purposes. But see Wrede v. AT & T, Civ. No. 83-283-1, slip op. at 9-10 (M.D.Ga. May 28, 1984); Phonetele v. AT & T, Civ. No. 74-3566, slip op. at 8-9 (C.D.Cal. January 19,1984). D. Unfairness to AT & T In Parklane Hosiery Co. v. Shore, supra, 439 U.S. at 330-31, 99 S.Ct. at 651-52, the Supreme Court listed three situations in which it may be unfair to the defendant to apply offensive, non-mutual collateral estoppel: If a defendant in the first action is sued for small or nominal damages, he may have little incentive to defend vigorously, particularly if future suits are not foreseeable. The Evergreens v. Nunan, 141 F.2d 927, 929 (CA2); cf. Berner v. British Commonwealth Pac. Airlines, 346 F.2d 532 (CA2 [d Cir.1965]) (application of offensive collateral estoppel denied where defendant did not appeal an adverse judgment awarding damages of $35,000 and defendant was later sued for over $7 million). Allowing offensive collateral estoppel may also be unfair to a defendant if the judgment relied upon as a basis for the estoppel is itself inconsistent with one or more previous judgments in favor of the defendant. Still another situation where it might be unfair to apply offensive estoppel is where the second action affords the defendant procedural opportunities unavailable in the first action that could readily cause a different result. AT & T contends that it should not be estopped from relitigating the Litton judgment for the latter two reasons. 1. Inconsistent Judgments. AT & T contends that various portions of the Litton judgment are inconsistent with an opinion in United States v. American Tel & Tel. Co., 524 F.Supp. 1336 (D.D.C. 1981) , rulings of the FCC and state regulatory agencies, and a National Academy of Sciences report. Parklane Hosiery, supra, explicitly states that previous, inconsistent judgments may bar application of collateral estoppel; nowhere does the opinion suggest that inconsistent determinations other than final judgments may act as a bar. See. also Hardy v. Johns-Manville Sales Corp., 681 F.2d 334, 346 (3d Cir. 1982) ; but see a contrary analysis by the Court of Appeals in Faucett, supra, at 129-130. a. Administrative and Other Determinations However, AT & T contends that the preclusive effect of a final judgment may be blocked by the existence of administrative agency determinations which are inconsistent with that judgment. In support of this contention, AT & T offers two arguments. First, it argues that the fact that these rulings were not final judgments is not controlling because the doctrine of collateral estoppel is premised on an “underlying confidence” in the correctness of the judgment relied on, and therefore the fact that inconsistent determinations exist is more important than their form. Second, AT & T suggests that since administrative agency findings may themselves have collateral estoppel effect in some circumstances, they must also carry enough weight to bar the preclusive effect of a judgment with which they are inconsistent. Regarding AT & T’s first point, it is true that collateral estoppel is premised on an underlying confidence in the judgment relied on. Standefer v. U.S., 447 U.S. 10, 23 n. 18, 100 S.Ct. 1999, 2007 n. 18, 64 L.Ed.2d 689 (1980). As will be discussed later, the administrative rulings which AT & T cites are not inconsistent with Litton. However, for the purposes of the “inconsistent judgment” consideration, the form of the prior determination is significant. To illustrate the potential unfairness to defendants which the “inconsistent judgment” criterion is designed to prevent, the Supreme Court in Parklane cited a hypothetical case presented by Professor Currie. Parklane, supra, 439 U.S. at 330 n. 14, 99 S.Ct. at 651 n. 14. In his hypothetical, Currie posited a railroad collision which injures 50 passengers, each of whom brings individual suit against the railroad. Currie argues, and the Court implicitly agreed, that if the railroad won the first 25 suits and lost the 26th, plaintiffs in cases 27 through 50 should not be able to apply case 26 offensively against the railroad. This example aptly illustrates the purpose of the “inconsistent judgment” consideration, and suggests that the form of the prior determination is important. When courts in earlier cases have fully litigated an issue and reached inconsistent final judgments, there is good reason not to give preclusive effect to either judgment. The mere fact of the inconsistent judgments suggests that even after full consideration of the issue between adversary parties there remains ground on which a reasonable jury or court may differ. But where a determination is reached by an administrative agency, without the benefit of a full adversary process, there is no reason to bar the preclusive effect of a later final judgment reached in a fully litigated adjudication simply because it is inconsistent with the agency determination. The cases cited by AT & T in support of its argument that the administrative agency determinations are “inconsistent judgments” are unpersuasive. In Nasem v. Brown, 595 F.2d 801, 806 (D.C.Cir. 1979), the court treated as “well established” the “proposition that administrative proceedings may collaterally estop relitigation in the court.” However, it went on to say that such proceedings have preclusive effect when “an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to. litigate.” Id. quoting U.S. v. Utah Construction & Mining Co. 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966). In this case, the administrative determinations are not adjudications between parties which can be relied on for collateral estoppel. They are not the product of proceedings in which adverse parties presented conflicting evidence on the issues presented in this case. These administrative determinations did not afford the parties here an adequate opportunity to litigate the questions at issue in this case, and therefore should not be used to block the preclusive effect of Litton, in which these issues were fully litigated. For similar reasons, it is obvious that the report of the NAS is not a judgment inconsistent with Litton. b. United States v. AT & T and the Noerr-Pennington Doctrine. AT & T contends that the Litton court’s determinations (1) that the Noerr-Pennington Doctrine does not apply to AT & T’s opposition to certification before the FCC, and (2) that the opposition to certification constituted a sham under the “sham exception” to the Noerr-Pennington Doctrine both conflict with determinations of Judge Greene in United States v. American Tel. & Tel. Co., 524 F.Supp. 1336 (D.D.C.1981). One part of the government’s case against AT & T involved the claim that AT & T’s post-Carterfone policies on interconnection of customer-provided terminal equipment violated the antitrust laws. The government’s proof in this area consisted of a series of “episodes”, each describing the experience with the PCA requirements of individual companies which marketed terminal equipment. One of these episodes involved Litton’s experience marketing PBXs. United States v. AT & T, supra, 524 F.Supp. at 1349 & n. 40. In an earlier opinion, Judge Greene ordered that the government have access to the document discovery which had been undertaken in Litton because he considered the claims and issues in Litton to “represent a separate and identifiable segment of the government’s case here.” United States v. AT & T, 461 F.Supp. 1314, 1340-41 (D.D.C. 1978). Following the presentation of the government’s case, AT & T moved to dismiss. Under the heading “Interconnection of Customer-Provided Terminal Equipment,” Judge Greene reviewed the government’s evidence regarding the PCA requirement: The testimony and exhibits presented in support of the government’s contentions in these episodes tended to show that the PCA requirement was unnecessary; that the PCAs imposed by Bell were overly engineered and that their cost, when added to that of the terminal equipment itself, either foreclosed non-Bell manufacturers from the particular equipment market or made it difficult for them to compete with Western Electric; that PCAs were often unavailable, that their delivery was sometimes substantially delayed, or that they were incompatible with non-Bell equipment; and that the stated need for the PCA and the defects of some PCAs caused customers to fear that, unlike Western Electric products, non-Bell equipment was unsafe and unreliable. The eleventh episode is the “umbrella” package, concerning more generally Bell practices and policies with regard to the interconnection of customer-provided terminal equipment. The evidence presented in conjunction with this episode tended to show the following. As of 1968, the time of the Carterfone decision, defendants had considered at least two options to protect the network from harm by customer-provided equipment: the PCA requirement and a certification program. A certification program — that is, a means by which non-Bell equipment would be permitted to be connected to the network after it had been certified to meet certain technical standards — would have obviated the need for the PCAs, with their costs, problems, and drawbacks, and it would thus have been consistent with the FCC’s Carterfone mandate to liberalize interconnection policy. Nevertheless, defendants decided to implement a PCA tariff rather than the certification option. The government’s evidence further tended to show that, during the five-year period after 1968, defendants concluded that the implementation of some kind of certification program was feasible, but they nevertheless decided to oppose any liberalization of their interconnection policy (whether by certification or otherwise) out of concern over the effect on their revenues and market position. Defendants were at that time all aware of (and they encouraged) the barrier to competition created by the unavailability and inadequate maintenance of the PCAs as well as of the additional economic barrier these devices created because of their added cost. The government’s proof further indicated that defendants were unable ever to find empirical support for the proposition that the PCA policy was necessary to prevent actual harm to the telecommunications network. Finally, the evidence showed that, at approximately the same time that the FCC initiated its own certification docket on June 14,1972, Bell decided to continue to withhold support from any effort to establish a certification program in order to “buy time” for internal restructuring so as to enable it to prosper in a competitive market. United States v. AT & T, supra, 524 F.Supp. at 1349-50. The court concluded that “by and large, the evidence addressed sustained the government’s charges.” Id. at 1350-51. Thus, the factual findings of Judge Greene are not inconsistent with Litton on the claims of “anticompetitive or predatory conduct” and many other of the Litton findings for which Glictronix seeks collateral estoppel here. However, Judge Greene went on to consider the legal question of whether AT & T’s opposition to certification fell within the protection of the Noerr-Pennington doctrine. The doctrine holds that “the Sherman Act .... does not apply to ... activities compris[ing] mere solicitation of governmental action with respect to the passage and enforcement of laws ...” Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 138, 81 S.Ct. 523, 530, 5 L.Ed.2d 464 (1961). “Noerr shields from the Sherman Act a concerted effort to influence public officials regardless of intent or purpose ... Joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition”. United Mine Workers v. Pennington, 381 U.S. 657, 670, 85 S.Ct. 1585, 1593, 14 L.Ed.2d 626 (1965). The Noerr-Pennington doctrine applies to administrative proceedings. California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510-11, 92 S.Ct. 609, 611-12, 30 L.Ed.2d 642 (1972). Although his factual findings were consistent with the conclusion that AT & T opposed certification in bad faith, Judge Greene held that AT & T’s opposition to certification in proceedings before the FCC constituted “petitioning” activities which were entitled to Noerr-Pennington protection. United States v. AT & T, supra, 524 F.Supp. at 1350 n. 54 (“since this proof [of AT & T’s opposition to certification] directly concerns the positions taken by defendants before the FCC, the court may not rely on it as a basis for antitrust liability.”) and at 1363 and n. 110. This legal conclusion conflicts with the holding of the Litton court that the opposition to certification was not petitioning activity and did not fall within the Noerr-Pennington doctrine. Litton, supra, 700 F.2d at 809. Both Judge Greene and the Litton court agreed that AT & T’s filing of the PCA tariff constituted a private commercial action, and not advocacy before the FCC which would warrant Noerr-Pennington protection. Litton, supra, 700 F.2d at 807 and n. 32; United States v. AT & T, supra, 524 F.Supp. at 1350 & n. 47. However, unlike Judge Greene, the Litton court held that opposition to certification, like the filing of the tariff, was not entitled to Noerr-Pennington protection. The court rejected AT & T’s argument that its opposition “amounted to no more than espousing a position before an administrative body.” Litton, supra, 700 F.2d at 809. Its reasoning appears to have been that the opposition was merely a bad faith effort to maintain the tariff and was therefore not entitled to any more protection than was the act of filing the tariff. The court stated: Much of our analysis relating to the filing of the interface tariff applies to AT & T’s opposition to certification. Opposition to certification is simply the other side of the interface tariff coin; AT & T’s filing and maintenance of the PCA requirement was the very embodiment of opposition to the only feasible alternative — certification standards. Litton, supra, 700 F.2d at 809. Glictronix seeks a ruling, based on Litton, that the defense of the Noerr-Pennington doctrine is inapplicable to the anti-competitive or predatory conduct alleged in this case. Regarding the applicability of Noerr-Pennington to the opposition to certification, Judge Greene’s opinion constitutes a judgment inconsistent with the Litton judgment. Collateral estoppel cannot be applied to foreclose the question of whether the opposition to certification may be entitled to Noerr-Pennington protection. A second reason exists for this conclusion. As a general matter, collateral estoppel may apply to questions of law. IB J. Moore 110.448 at 840. However, this rule is subject to broad qualifications. Restatement (second) of Judgments § 29(7) states that the offensive use of collateral estoppel is inappropriate where “[t]he issue is one of law and treating it as conclusively determined would inappropriately foreclose opportunity for obtaining reconsideration of the legal rule on which it was based.” Elaborating on this provision, Comment i to § 29(7) states, “[t]his consideration is especially pertinent when there is a difference in the forums in which the two actions are to be determined....” There is considerable question whether the Litton court’s ruling that the opposition to certification is not entitled to Noerr-Pennington protection is correct. Judge Greene’s opinion conflicts directly with the Litton court on this point. Numerous other cases also suggest that many courts would consider opposition to certification to be a protected effort to influence government action. See e.g.,