Full opinion text
ALARCON, Circuit Judge: These appeals present, in the context of a private antitrust lawsuit, the familiar issue of whether the district court properly granted the parties’ respective motions for summary judgment. In its complaint, Be-taseed, Inc., alleges that U & I Inc. violated the Sherman Act’s proscription against tying arrangements, reciprocal dealings, and monopolization. 15 U.S.C. §§ 1, 2. Beta-seed also charges that U & I committed the common law torts of disparagement and interference with contractual relations. By counterclaim, U & I charges that Betaseed and the Washington Sugar Beet Growers Association (WSBGA) conspired to fix the price of sugar beet seed in the Washington seed market. Betaseed moved for summary judgment on its tie-in/reciprocal dealing claim and on U & Vs price-fixing counterclaim. The WSBGA also moved for summary judgment on U & I’s counterclaim. U & I moved for summary judgment on all counts of Beta-seed’s complaint. The district court denied Betaseed’s motion for summary judgment on its tie-in/reciproeal dealing claim and granted Betaseed’s motion for summary judgment on U & I’s price-fixing counterclaim. The district court also granted U & I’s motion for summary judgment on all of Betaseed’s antitrust and common law claims. The basis for this ruling was that U & I’s actions were justified by legitimate business objectives and that U & I acted in a manner which had the least restrictive impact on competition. The district court also concluded that, since U & I could not prove any antitrust injury or damages and U & I’s counterclaim did not state an antitrust complaint, the claim was not sustainable as a matter of law. Both parties appeal the district court’s rulings. We affirm the district court’s judgment as to U & I’s counterclaim for price-fixing. We reverse the judgment on Betaseed’s claims because there are disputed facts material to Betaseed’s claim for relief and to U & I’s asserted business justification defense and we are unable, after viewing the record in a light most favorable to Betaseed, to conclude that U & I is entitled to judgment as a matter of law. I. STANDARD FOR REVIEW As a general rule summary judgment is disfavored in complex antitrust litigation, particularly where extensive factual determinations must be made with respect to the issues of intent and motive. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); Beltz Travel Service, Inc. v. International Air Transport Ass’n., 620 F.2d 1360, 1364-65 (9th Cir. 1980). It is clear, however, that this general reluctance does not preclude the use of summary judgment in antitrust litigation. Ron Tonkin Gran Turismo, Inc. v. Fiat Distributors, Inc., 637 F.2d 1376, 1381 (9th Cir. 1981), cert. denied, 454 U.S. 831, 102 S.Ct. 128, 70 L.Ed.2d 109 (1981). Summary judgment is appropriate in the following instances: (1) “In the absence of ‘any significant probative evidence tending to support the complaint’”, First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 1593, 20 L.Ed.2d 569 (1968) and; (2) when the moving party has shown that there is no genuine issue of material fact and, upon viewing the evidence and factual inferences drawn therefrom in a light most favorable to the non-moving party, it is evident that the moving party is entitled to judgment as a matter of law. Program Engineering, Inc. v. Triangle Publications, Inc., 634 F.2d 1188, 1192-1193 (9th Cir. 1980). II. FACTS A. Undisputed Facts Betaseed, a Minnesota corporation, and U & I, a Utah corporation, sell sugar beet seeds to growers, including Washington farmers. Betaseed sells only sugar beet seeds; U & I sells seeds and buys sugar beets for processing sugar. U & I is the only processor of sugar beets in the relevant geographic area due to freight barriers rendering impractical the shipment of Washington beets outside this area. Each year, U & I enters into contracts with individual Washington sugar beet growers for the purchase of sugar beets. The terms of these contracts are annually negotiated and agreed to by U & I and the Washington Sugar Beet Growers Association (WSBGA), whose membership comprises eighty to ninety percent of Washington sugar beet growers. Prior to 1972, U & I was the sole supplier of sugar beet seed; the WSBGA-approved sugar beet purchase contracts provided that sugar beet growers could use only U & I seed. The 1972, 1973, and 1974 contracts did not contain any seed restriction. These contracts contained a skewed scale of payment in which U & I over paid growers whose sugar beets “had a below average sugar content and under paid growers whose beets had an above average sugar content.” It was described as a type of insurance for growers who had bad years. In 1972, Betaseed introduced its HH7 and HH22 sugar beet seeds into the Washington sugar beet seed market. According to Kent Nielsen, U & I’s geneticist, this was the “first time [the industry was] faced with an apparently bonifide [sic] attempt by an independent seed company, [independent of a sugar beet processing company] to sell sugar beet seed to sugar beet growers throughout the United States on a continuing basis.” From 1972 to 1976, Betaseed’s sugar beet seed sales steadily increased. In 1973, U & I fieldmen began monitoring the amount of acreage planted with Betaseed’s seeds and reporting their findings to U & I’s agricultural superintendents. In 1975, U & I’s sugar beet purchase contracts contained the following restriction: The grower shall grow, during the year 1975, — acres of sugar beets and shall sell the entire crop therefrom to the COMPANY, and the COMPANY shall buy and pay for the same upon the terms and conditions hereinafter set forth. It is further agreed that sugar content, disease susceptibility, processability, purity, and ability to retain quality under storage are with other characteristics necessary to qualify the beets which COMPANY is obligated to buy under his contract, COMPANY therefore will only be obligated to buy beets grown from Utah-Idaho Sugar Company seeds number Hybrid 3 and 8 or such other seed as has been established by tests satisfactory to the COMPANY to produce beets having substantially the same characteristics as beets produced from said number 8 and 8 seed mentioned above, (emphasis added). In 1976, U & I offered an “alternate contract” which the WSBGA refused to approve. According to this contract, growers could use other companies’ seed but would be paid less for these sugar beets than under the “regular” or WSBGA approved contract. The parties draw different inferences from these facts and refer to additional facts to support their respective positions. We next examine these facts. 1. U & I’s Rationale for the Restriction U & I maintains that the seed restriction clause was necessary because Betaseed’s seeds are inferior to U & I’s seeds in terms of sugar content. The purchase of these beets under the regular contract would, in U & I’s view, lead to financial ruin since U & I would have to pay more for such beets. U & I nevertheless did not enforce the seed restriction in 1975 because, according to Keith Wallentine, Vice President of U & Fs corporate relations, Betaseed had not submitted data on its seed, and U & Fs tests on Betaseed’s seed were “not conclusive.” U & I adopted the provision in 1975, according to Wallentine, because “it was becoming apparent that beets grown from Betaseed seed tended to have lower sugar content on [the] average than beets from U & I seed” and because in 1975 the contract was changed so that U & I assumed all the risk of “loss of quality of beets while in storage.” Wallentine also asserted that, after the 1975 sugar beet crop had been harvested, two U & I receiving stations in Washington had sugar beets with lower sugar content than at other stations in the same area. Investigation of the situation by U & I employees “uncovered facts indicating that certain growers who had delivered beets to those stations had planted substantial amounts of Betaseed seed.” 2. The 1976 Documents Betaseed maintains that the sequence of events as demonstrated by U & I documents indicates that the true purpose of the seed restriction, enforced in 1976, was to eliminate seed competition. A summary of the documents follows. On February 5, 1976, Wallentine distributed to various U & I officials material from U & Fs research department concerning studies of U & I seed and seed of other companies. Wallentine invited them to “examine it preliminary to the meeting to be held for development of [U & I] policy on use of seed from sources outside [U & I’s] company.” The materials contain: (1) a summary of the comparative qualities of U & I hybrid 8 seed and Betaseed HH22 seed; (2) tables listing the economic and time factors in developing sugar beet varieties with improved agronomics, processing, and storage characteristics, including the potential profit from the sale of sugar beet seed; and a summary describing U & I 8 as “probably the best all around hybrid for use in the U & I sugar beet growing area.” The author of the report concludes that while U & I 8 seed is probably the best, “competition from other seed sources is keen and unless improved varieties are developed substantial acreage will be lost to other varieties.” In addition to noting that this loss would result in a fall of profits due to lower seed sales, the author asserts that it would cause reduced mill efficiency because “competing seed concerns are not likely to be concerned with the processing quality of the sugar beet.” The author concludes optimistically that “[fortunately improved varieties are forthcoming,” but warns that “a continued strong program is needed to maintain and hopefully improve our competitive position in variety development.” On February 11,1976, U & I sent a letter to all sugar beet growers informing them that because no scientific data for non-U & I seed had been received by U & I, U & I would limit its 1976 purchase of sugar beets to only those beets grown from U & I seed (U & I 3 and U & I 8) “until such time as it is demonstrated by tests to the Company’s satisfaction that other beet seeds possess as good or better characteristics as the Hybrids Three and Eight.” On February 13, 1976, Kent Nielsen, U & I’s manager for Agricultural Research, sent a letter to U & I’s fieldmen, agricultural superintendents, and district managers criticizing Betaseed’s HH22 seed as compared to U & I’s 8 seed. The letter also indicated recent improvements in U & I’s seed. On February 25, 1976, Gene Peterson, U & I’s general agricultural superintendent, wrote to Duane Melling, Betaseed’s president, informing him that U & I could not accept Betaseed’s seed because the test data submitted by Betaseed confirmed U & I’s analysis that Betaseed’s seed provided higher tonnage at the expense of lower recoverable sugar. Peterson explained that under the terms of sugar beet purchase contract, beets grown from Betaseed’s seed did not substantially satisfy U & I’s economic and contractual requirements relating to sugar content, storage, processing, handling, sugar recovery, transporting and disease susceptibility to the same extent as did U & I’s seeds. Peterson also asserted that when U & I negotiated the 1976 contract, the agreement “centered around a specific scale of payments between levels of sugar content.” The increments between levels of sugar content in that scale, according to Peterson, did not compensate for the extra cost of handling, transporting, and processing beets with lower sugar content. On March 8, 1976, U & I sent a letter to Washington sugar beet growers informing them that U & I had drafted an alternate agreement with an adjusted scale of payment “to reflect the characteristics of Beta-seed’s seed,” and that U & I would accept beets grown from Betaseed under this contract. The scale of payment for sugar beets under the “alternate contract” was lower than that of the “regular contract.” The WSBGA refused to approve the alternate contract. Subsequently, U & I sent the growers another letter stating that the WSBGA had threatened to enjoin U & I from using this contract and, if it successfully did so, the agreement would be void. None of the growers contracted with U & I pursuant to this alternate contract. Each of the growers who had ordered all of their seed from Betaseed — a total of $287,675.00 worth of seed — cancelled their orders. B. Disputed Facts Betaseed’s antitrust and common law tort claims are based upon the seed restriction clause and the “alternate” contract. Beta-seed maintains that the seed restriction clause, which permits use of other companies’ seeds if they are satisfactory to U & I, is in fact an illusory seed specification clause for two reasons: first, it lacks objective standards to determine whether other companies’ seeds are acceptable and second, U & I never approved any seed under the regular contract except its own varieties. Betaseed also complains that the “alternate” contract was an equally empty gesture since U & I knew that, without WSBGA approval of the contract, growers would not enter into this contract. Beta-seed also maintains that U & I drafted the alternate contract so that it was not as desirable to growers as the regular contract. Under the alternate contract, U & I would pay growers less money for sugar beets grown from Betaseed seed than for those grown from U & I seed pursuant to the regular contract. Betaseed charges that U & I’s actions were primarily motivated by an anticompetitive intent. U & I asserts that its actions were justified by legitimate business objectives because the WSBGA refused to change or unskew the regular contract’s skewed scale of payment. U & I based this scale on the predictable genetic characteristics of U & I seed. U & I argues that since the regular contract’s skewed scale required U & I to pay more for sugar beets with low sugar content, the purchase of sugar beets grown from seed that produced low sugar content beets would have caused U & I financial ruin. Thus, U & I maintains, the seed restriction clause and the alternate contract were the only alternatives available to accomplish the legitimate business objective of profitably maintaining its sugar beet processing factory. Betaseed disputes the following factual assertions underlying U & I’s defense: (1) that U & I’s seed consistently demonstrated genetic characteristics upon which U & I could rely in adopting the skewed scale of payment; (2) that U & I could not obtain a change in the payment scale; (3) that under the skewed scale U & I would suffer financial ruin if it had purchased sugar beets grown from Betaseed’s seed; (4) that Beta-seed’s seed is inferior to U & I’s seed; and (5) that the seed restriction clause and the alternative contract were the only means available to U & I to achieve its business objective of profitably maintaining its business. The following summary of documents demonstrates the dispute. 1. The Skewed Payment Scale Betaseed maintains that neither the seed specification clause nor the non-WSBGA approved alternative contract can excuse the fatal condition in the sugar beet purchase contract that in fact required growers to use U & I seed. Betaseed argues that U & I had available to it a method of accomplishing its business objective that would have had a less restrictive impact on the competitive process — a method that U & I had used in areas where it had competition from other sugar beet processors — purchasing sugar beets grown from any seed, including Betaseed’s seed, pursuant to an un-skewed scale of payment. U & I acknowledges that, in Utah and Idaho, it purchased sugar beets grown from Betaseed’s HH22 and HH7 seeds according to an unskewed scale of payment. U & I asserts that this procedure was not available in Washington, because the WSBGA would not agree to an unskewed scale of payment, although U & I had repeatedly requested such a change since 1972. Betaseed disputes this assertion first by pointing to evidence that U & I did not ask for a change in the payment scale until 1976, although it had adopted the seed"” restriction clause in 1975. Second, Betaseed points to notes of the 1977 contract negotiations that indicate the skewed payment scale was retained in those contracts in exchange for WSBGA’s recommendation for the use of U & I’s seed Third, Beta-seed refers to U & I’s agreement in 1978 to not change the scale in order to obtain an increase in the amount of acreage to be delivered to a particular factory. Fourth, Betaseed challenges U & I’s good faith negotiations by comparing the present situation to the past. U & I successfully obtained an unskewed scale by increasing the increment in the price paid for beets for each extra percentage point of sugar in the beet. Betaseed also disputes U & I’s contention that it adopted the skewed scale only because it knew and was able to rely upon the genetic characteristics of sugar beets grown from its seed. In this respect, Betaseed points to the test results revealing substantial differences between different entries of U & I seed in the same test — the most significant being sugar percentage. Beta-seed also asserts that these differences show that U & I’s seed specification clause, which permits the use of other companies’ seed if it is substantially the same as U & I seed, is illusory because these companies would not know which U & I test result should be used as a comparison or basis for approval. 2. Inferiority of Betaseed’s Seed Whether U & I 8 is superior to Betaseed HH22 or HH7 in terms of sugar content is disputed by both parties’ experts. U & I’s expert, Dr. Nielsen, concludes that beets grown from U & I seeds consistently and to a statistically significant degree have a higher sugar content than beets grown from Betaseed’s HH22 seed, although the differences between U & I seed and Beta-seed HH7 are not as consistent and not as frequently statistically significant. U & I maintains that tests from Betaseed confirm its initial results that U & I’s seeds produce beets with higher sugar content than Beta-seed seeds. According to the calculations of U & I’s finance officer, U & I would have lost substantial profits had it accepted, pursuant to the regular contract’s skewed scale, beets grown from Betaseed seed. Be-taseed’s expert, Dr. Stander, refutes the fact that U & I would have lost substantial profits had it accepted beets grown from Betaseed’s seeds. According to Stander’s calculations, beets from HH22 would be less valuable by 11 cents per ton than beets from U & I 8 seed, while beets from HH7 would be 75 cents more valuable per ton than U & I 8 seed. He calculated that pursuant to the regular contract, U & I would underpay growers who used HH22 by $1.79 per ton rather than over pay $1.66 per ton as U & I’s expert calculated. Similarly, HH7 would yield a $1.28 underpayment as compared to U & I 8. Stander concluded that U & I would have gained $1,676,032 if it had purchased all beets grown from HH22 seed, while Whipple, U & I’s finance officer, concluded that U & I would have lost $2,791,-692. Stander also asserted that U & I would have gained $192,626 had it purchased HH7 beets. The affidavits of Stander and Nielsen also conflict as to whether dissimilarities between different years of U & I’s own seed are statistically significant. Stander criticized Whipple’s calculations as to U & I 8 seed because they assumed a very constant and predictable pattern of results from U & I seed, which did not conform to the realities of the situation. Finally, Stander concluded that, based on the differences in the various years’ seed production of HH22 and because one could not know what year’s seed production of U & I 8 was being used in comparison, he could not state with certainty that U & I 8 contained a greater sugar percentage than HH22. That answer^ he noted, depends on many variables. He also concluded that there is no statistical difference in sugar content between HH7 and U & I 8, and that in the 1975 and 1976 tests conducted by Dr. Theurer for the Department of Agriculture, U & I 8 performed relatively low compared to the other entries. Betaseed also points to evidence that its HH7 seed was acceptable to U & I under the regular contract yet U & I never approved the variety. Although U & I 8 is the basis for comparison by the experts, the contract specification does not state which seed’s characteristics, U & I 8 or U & I 3, are to be the basis for comparing and approving other companies’ seeds. III. THE PER SE CLAIM A. Antitrust Classification 1. Tying Arrangement Tying arrangements, which involve a seller’s refusal to sell one product (the tying product) unless the buyer also purchases another (the tied product) are presumptively illegal if certain elements exist. Northern Pacific Railroad Co. v. United States, 356 U.S. 1, 5-6, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958). These elements are: 1) there must be in fact a tying arrangement between two distinct products or services; 2) there must be some modicum of coercion shown — that is a showing of an onerous effect on an appreciable number of buyers coupled with a demonstration of sufficient economic power in the tying market; 3) the defendant must have sufficient economic power in the tying market to impose significant restrictions in the tied product market; and 4) the amount of commerce in the tied product market must not be insubstantial. Moore v. Jas. H. Matthews & Co., 550 F.2d 1207, 1212, 1216-17 (9th Cir. 1977). Once these are demonstrated, no specific showing of unreasonable anticompetitive effect is needed. Moore v. Jas. H. Matthews & Co., 550 F.2d 1207 (9th Cir. 1977). The tying per se rule, however, “is exceptional in that it permits the defendant to offer justifications for undertaking the tie [citations]. A tie-in may be justified if it is implemented for a legitimate purpose and if no less restrictive alternative is available [citations].” Phonetele, Inc. v. American Telephone and Telegraph Company, 664 F.2d 716, 738-39 (9th Cir. 1981). The defendant has the burden of showing that the tie-in was reasonable for the entire time it was in effect. Id. at 739. In Moore, this court discussed at length the rationale for the per se presumptive illegality of tie-ins; the rationale is premised upon the leverage theory. 550 F.2d at 1212-1213. Competitors are denied free access to the tied market product, not because the party imposing the arrangement has a superior product, but rather because of the power of leverage exerted by the tying product. By conditioning the sale of one commodity on the purchase of another, “a seller coerces the abdication of the buyers’ independent judgment as to the ‘tied’ product’s merits and insulates it from the competitive stresses of the market.” Northern Pacific Railroad Co. v. United States, 356 U.S. at 10, 78 S.Ct. at 521. “Tying arrangements serve hardly any purpose beyond the suppression of competition[,]” Standard Oil Co. of California v. United States, 337 U.S. 293, 305-06, 69 S.Ct. 1051, 93 L.Ed. 1371 (1949) because the non-anticompetitive purpose “can be adequately accomplished by other means much less inimical to competition.” Northern Pacific Railroad Co., 356 U.S. at 6 n.5, 78 S.Ct. at 518 n.5 (citations omitted). Betaseed maintains that U & I’s sugar beet purchase contracts, both prior to and after March 8, 1976, constituted illegal per se tying arrangements. These contracts provided that U & I would purchase sugar beets grown only from U & I seed or other seed that had been established by tests satisfactory to U & I to produce beets having substantially the same characteristics as beets produced by U & I seed. Betaseed argues that these contracts violate section 1 of the Sherman Act, 15 U.S.C. § 1, because U & I, the only sugar beet processor in Washington and the sole purchaser of sugar beets grown in Washington, never approved any other seed under this contract. 2. Coercive Reciprocal Dealing Betaseed acknowledges that U & I’s sugar beet purchase contract is not the prototype of a tie-in and is more properly characterized as a “reciprocal dealing” — a dealing in which two parties face each other as both buyer and seller and one party agrees to buy the other party’s goods on condition that the second party buys other goods from it. Spartan Grain & Mill Co. v. Ayers, 581 F.2d 419, 424 (5th Cir. 1978), cert. denied, 444 U.S. 831, 100 S.Ct. 59, 62 L.Ed.2d 39 (1979). The spectrum of the practice— which, in essence, provides that if you buy from me, I’ll buy from you — extends from the use of overt coercion to the use of a mutual patronage arrangement. United States v. General Dynamics Corporation, 258 F.Supp. 36, 57 (S.D.N.Y.1966). Coercive reciprocity presupposes the existence of economic leverage in one market to gain an unfair advantage in another, while mutual reciprocity occurs when both parties stand on equal footing with respect to purchasing power yet they agree to purchase from one another. Id. at 59; Comment, A Re-evaluation of Reciprocal Dealings Under the Federal Antitrust Laws: Spartan Grain & Mill Co. v. Ayers, 11 Loy.U.Chi.L.J. 577, 597 (1980). Relying on Spartan Grain & Mill Co. v. Ayers, 581 F.2d 419 (5th Cir. 1978), cert. denied, 444 U.S. 381, 100 S.Ct. 59, 62 L.Ed.2d 39 (1979), Betaseed argues that this court should judge the coercive reciprocal dealing contracts at bar according to the legal standards applied to tie-ins. In Spartan Grain, the Fifth Circuit reasoned that tie-ins and reciprocal dealings should be analyzed alike because both arrangements have the same substantial anticompetitive effect: the use of economic power in one market to restrict competition in another market. Although this circuit has had occasion to discuss and apply the per se tie-in standard, see, e.g., Hirsh v. Martindale-Hubbell, Inc., 674 F.2d 1343 (9th Cir. 1982); Krehl v. Baskin Robbins Ice Cream, 664 F.2d 1348 (9th Cir. 1982); Phonetele, Inc. v. American Telephone and Telegraph Co., 664 F.2d 716 (9th Cir. 1981); Moore v. Jas H. Matthews Co., 550 F.2d 1207 (9th Cir. 1977); and Siegel v. Chicken Delight, Inc., 448 F.2d 43 (9th Cir. 1971), cert. denied, 405 U.S. 955, 92 S.Ct. 1173, 31 L.Ed.2d 232 (1972), we have not yet addressed the interface of tie-ins and coercive reciprocal dealings and whether they should be judged by the same standard. For the reasons explained more fully in the analysis that follows, and because we believe the challenge restraint here fits within the tie-in per se category, see Gough v. Rossmoor, 585 F.2d 381, 386 (9th Cir. 1978), cert. denied, 440 U.S. 936, 99 S.Ct. 1280, 59 L.Ed.2d 494 (1979), we agree with the reasoning of the Fifth Circuit in Spartan Grain & Mill Co. v. Ayers, 581 F.2d 419, cert. denied, 444 U.S. 831, 100 S.Ct. 59, 62 L.Ed.2d 39 (1979) that because the labels tie-in and coercive reciprocal dealing refer to similar phenomena, coercive reciprocal dealings should be judged according to the standards applied in a per se tie-in analysis. Since we hold that there are material and genuine disputed facts as to a factual pattern of coercive reciprocity, our discussion is limited to coercive reciprocal dealings. (a) Analysis 1. Spartan Grain In Spartan Grain, the Fifth Circuit considered, in the context of the chicken broiler industry, a reciprocal dealing arrangement between Spartan Grain, a feed merchant, and various producers of chicken broilers. Prior to analyzing the challenged business practice, the court examined, from an historical perspective, the chicken broiler industry. In the early years of the industry, the various stages of production were handled by different business entities. After World War II, the industry began integrating the production process so that those involved in the stages of production lost their independence. Spartan Grain was a feed merchant, operating on a non-integrated basis. Its markets for feed were slowly disappearing as other feed merchants increased their control over producers and growers through integration. The producers in Spartan raised egg-laying chickens both on a contract basis and on an independent basis. Under either system, the producers would only buy chickens when someone was committed to buying their eggs, thus guarding against the risk that the eggs could not be marketed. When the broiler industry fell into disarray, leaving no guaranteed markets for the producer’s eggs on either a contract or independent basis, Spartan Grain introduced its own form of contractual integration. It negotiated with certain broiler hatcheries for commitments to take eggs and arranged for primary breeders to produce flocks of laying chicks. Spartan Grain then offered these flocks to various producers, guaranteeing that it would buy the eggs and sell them to the already committed hatcheries. Spartan offered this program to producers on the condition that they buy only Spartan Grain’s feed. Spartan Grain later commenced legal action against four producers who had joined the program but had failed to pay the balance on their feed accounts. These producers asserted antitrust counterclaims, charging that Spartan Grain illegally tied the sale of feed to both the sale of chickens and the purchase of eggs. The producers also characterized the arrangement as a reciprocal dealing. The court noted that the transactions at issue in the case could be characterized as either a reciprocal dealing or a tie-in. The reciprocal arrangement involved Spartan Grain’s purchase of eggs from producers on the condition that the producers buy its feed. The tie-in resulted where Spartan Grain arranged for the producers to buy flocks as well as feed. The court declined to shape the arrangement to fit either label because the arrangement could fit either label and because the two labels refer to similar phenomena: In each case one side of a transaction has special power in the market place. It uses this power to force those with whom it deals to make concessions in another market. In tying arrangements, a seller with economic power forces the purchaser to purchase something else to abstain the desired item. In reciprocal dealings a buyer with economic power forces a seller to buy something from it to sell its goods. In both cases, the key is the extension of economic power in one market to another market. 581 F.2d at 425. Applying the per se tie-in standards set forth in Northern Pacific Railway Co. v. United States, 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958), the court concluded that there could be no per se liability. Although a substantial amount of commerce was involved, the producers had failed to show that Spartan Grain had sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product. 2. Pre-Spartan Grain Precedent The Fifth Circuit’s approach to determining that reciprocal dealings come within the ambit of the per se classification is not without precedent. Courts and commentators have analogized reciprocal dealings to tie-in arrangements. E.g., Columbia Nitrogen Corp. v. Royster Co., 451 F.2d 3, 13 (4th Cir. 1971); Ryals v. National Car Rental System, Inc., 404 F.Supp. 481, 486 (D.Minn.1975); United States v. General Dynamics Corp., 258 F.Supp. 36, 65 (S.D.N.Y.1966). Comment, A Re-evaluation of Reciprocal Dealings Under the Federal Antitrust Laws: Spartan Grain v. Mill Co. v. Ayers, 11 Loy.U.Chi.L.J. 577, 596-98 (1980). Handler, Emerging Antitrust Issues: Reciprocity, Diversity and Joint Ventures, 49 Va.L.Rev. 433, 437 (1967); Hausman, Reciprocal Dealing and the Antitrust Laws, 77 Harv.L.Rev. 873, 883-84 (1964). In dicta, the Eighth and Third Circuits have observed that certain types of reciprocity are per se anticompetitive practices that violate the antitrust laws. E.g., Battle v. Lubrizol Corp., 673 F.2d 984, 987 (8th Cir. 1982) (quoting Cernuto, Inc. v. United Cabinet Corp., 595 F.2d 164 (3d Cir. 1979)). In Columbia Nitrogen, the Fourth Circuit, also in dictum, noted that coercive reciprocity has long been recognized as an anticompetitive practice that violates the antitrust laws. 451 F.2d at 14 n.17. Recently, the First Circuit upheld a dismissal of a complaint alleging a section one Sherman Act violation because there was no suggestion that the defendant’s termination of plaintiff as defendant’s builder — dealer was “ ‘exercised in furtherance of an unlawful arrangement with others — such as a tie-in arrangement, [or] reciprocal dealing arrangement, ...’” Gilbuilt Homes, Inc. v. Continental Homes of New England, 667 F.2d 209, 210 (1st Cir. 1981) (quoting ABA, Antitrust Law Developments, 20 (1975)). The earliest reciprocal dealing cases involve the Federal Trade Commission’s attack on the practice as an unfair method of competition. E.g., In re California Packing Corp., 25 F.T.C. 379 (1937) (large diversified food processing company used its purchasing power and freight volume to require suppliers and transport companies to patronize its subsidiary terminal corporation); In re Mechanical Mfg. Co., 16 F.T.C. 67 (1932) (large meat packing firm with vast power as major railroad shippers acquired control of minor manufacturers of railroad equipment; during later negotiations with railroads, the firm indicated that unless railroads purchased equipment from the manufacturers controlled by the meat firms, their dealings with the railroad would be reduced); In re Waugh Equip. Co., 15 F.T.C. 232 (1931) (same). In F.T.C. v. Consolidated Foods Co., 380 U.S. 592, 85 S.Ct. 1220, 14 L.Ed.2d 95 (1965), the Supreme Court first discussed the anti-competitive effects of reciprocity in the context of a Clayton Act challenge to a corporate merger. Consolidated Foods, an owner of processing plants and a network of wholesale and retail food stores, had acquired Gentry, Inc., a manufacturer of dehydrated onion and garlic. Due to the threat of reciprocal buying and the power to foreclose competition, the FTC issued an order of divestiture. In reviewing the order, the Supreme Court held “at the outset” that reciprocity made possible by such an acquisition is “one of the congeries of anticompetitive practices at which the antitrust laws are aimed.” 380 U.S. at 594, 85 S.Ct. at 1222. The court reasoned that the practice “results in ‘an irrelevant and alien factor,’ [citation], intruding into the choice among competing products, ...” Id. In reaching the conclusion that the FTC’s order of divestiture was supported by substantial evidence the Court quoted, with approval, the FTC’s rationale: “ ‘If reciprocal buying creates for Gentry a protected market, which others cannot penetrate despite superiority of price, quality, or service, competition is lessened ....’” 380 U.S. at 599, 85 S.Ct. at 1224. Relying on Consolidated Foods, lower federal courts have concluded that reciprocity may violate §§ 1 and 2 of the Sherman Act. See, e.g., Ryals v. National Car Rental System, Inc., 404 F.Supp. 481, 485-86 (D.Minn.1975) (court agreed that reciprocal dealing is antitrust violation, but found no violation because only one product was involved in the case; thus, plaintiffs failed to allege facts establishing reciprocity in fact); W. L. Gore & Associates, Inc. v. Carlisle Corp., 381 F.Supp. 680, 703 (D.Del.1974), aff’d in part and rev’d in part, 529 F.2d 614 (3d Cir. 1976) (court stated that reciprocal dealing could violate §§ 1 and 2 of the Sherman Act but facts of case — threatened use of reciprocity — supported only an attempt to monopolize § 2 claim; on appeal, the Third Circuit affirmed in part but reversed on the antitrust claim because it found the facts insufficient to state a claim, although the court agreed with the legal principles 529 F.2d at 624). United States v. General Dynamics Corp., 258 F.Supp. 36, 59, 65-67 (S.D.N.Y.1966) (court stated that both mutual and coercive reciprocity violated § 1 of the Sherman Act; court found no violation because government failed to prove that a substantial amount of commerce was involved). 3. Impact on Competition The rationale for invoking the presumption of illegality in tie-ins — their pernicious effect on competition and lack of redeeming procompetitive virtues — applies with equal force to coercive reciprocal dealings. The Supreme Court has indicated that whether a court invokes a per se or rule of reason analysis, the purpose of the analysis is to form a judgment about the competitive significance of the restraint. National Society of Professional Engineers v. United States, 435 U.S. 679, 692, 98 S.Ct. 1355, 1365, 55 L.Ed.2d 637 (1978). In characterizing conduct under the per se rule, the focus of our inquiry must be on whether the effect and the purpose of the practice “are to threaten the proper operation of our predominantly free-market economy — that is, whether the practice facially appears to be one that always or almost always tend [sic] to restrict competition and decrease output, ... or instead [is] one designed to ‘increase economic efficiency and render markets more, rather than less, competitive.’ ” Broadcast Music, Inc. v. CBS, 441 U.S. 1, 19-20, 99 S.Ct. 1551, 1562, 60 L.Ed.2d 1 (1979) (quoting United States v. Gypsum Co., 438 U.S. 422, 441 n.16, 98 S.Ct. 2864, 2875 n.16, 57 L.Ed.2d 854 (1978)). Accord, Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 53 n.21, 97 S.Ct. 2549, 2559 n.21, 53 L.Ed.2d 568 (1977) (antitrust policy divorced from market considerations would lack any objective bench marks). Coercive reciprocity adversely impacts on competition in a manner similar to tie-ins. First, it erodes the traditional purchasing criteria of price, quality, and service. By conditioning the sale (tie-in) or purchase (coercive reciprocity) of one commodity on the purchase (tie-in) or sale (coercive reciprocity) of another, a seller (or buyer) “coerces the abdication of [the customers’] independent judgment as to the ‘tied’ [or second] product’s merits and insulates it from the competitive stresses of the open market.” Times-Picayune v. United States, 345 U.S. 594, 605, 73 S.Ct. 872, 878, 97 L.Ed. 1277 (1953). See also, Northern Pacific Railroad Co. v. United States, 356 U.S. 1, 6, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958) (tying arrangements force buyers to forgo their free choice between competing products). Coercive reciprocity “results in ‘an irrelevant and alien factor,’ [citation], intruding into the choice among competing products, creating at the least ‘a priority on the business at equal prices.’ ” FTC v. Consolidated Foods Corp., 380 U.S. 592, 594, 85 S.Ct. 1220, 1221, 14 L.Ed.2d 95 (1965) (quoting International Salt Co. v. United States, 332 U.S. 392, 397, 68 S.Ct. 12, 15, 92 L.Ed. 20 (1947); Northern Pacific Railroad Co. v. United States, 356 U.S. 1, 3, 6, 12, 78 S.Ct. 514, 517, 518, 521, 2 L.Ed.2d 545). Second, coercive reciprocity forecloses from a particular market those competitors of the buyer-seller who are without market leverage. See Northern Pacific Railroad Co., 356 U.S. at 6, 78 S.Ct. at 518; International Salt Co. v. United States, 332 U.S. 392, 396, 68 S.Ct. 12, 15, 92 L.Ed. 20 (1947). As with the tying arrangement, coercive reciprocity denies “competitors free access to the market” for the product, not because of a better product or a lower price but because of “power or leverage in another market.” Northern Pacific Railroad Co., 356 U.S. at 6, 78 S.Ct. at 518. Moreover, market entry by potential competitors will be discouraged when it is known that economic leverage, rather than marketing quality and efficiency, will produce business. Comment, A Re-evaluation of Reciprocal Dealings Under the Federal Antitrust Laws: Spartan Grain & Mill Co. v. Ayers, 11 Loy.U.Chi.L.J. 577, 583 (1980); Haus-man, Reciprocal Dealing and the Antitrust Laws, 77 Harv.L.Rev. 873, 879-80 (1964). Potential competitors may be required to enter simultaneously two separate product markets. Fortner Enterprises, Inc. v. United States Steel Corp., 394 U.S. 495, 513, 89 S.Ct. 1252, 1263, 22 L.Ed.2d 495 (1969) (Fortner I) (White, J., dissenting). Thus, in coercive reciprocity as in tying arrangements, the effect on competitors attempting to rival the tied product is “drastic: to the extent the enforcer of the tying arrangement [or the coercive reciprocal dealing practice] enjoys market control, other existing or potential sellers are foreclosed from offering up their goods to a free competitive judgment; they are effectively excluded from the marketplace.” Times-Picayune, 345 U.S. at 605, 73 S.Ct. at 878. Third, coercive reciprocity creates oligop-olistic and monopolistic industries inimical to the national economy. Comment, A Reevaluation of Reciprocal Dealings Under the Federal Antitrust Laws: Spartan Grain & Mill Co. v. Ayers, 11 Loy.U.Chi.LJ. 577, 582-83 (1980). Market leverage in one company increases to the detriment of competitors; consequently, the market structure becomes more concentrated and the number of competitors becomes fewer. A single party within the market is benefited at the expense of viable business competition within that market. In our view, the malevolent economic results of market foreclosure and raising of artificial entry barriers in a market tinged with coercive reciprocity evinces the anti-competitive and predatory nature of the practice. The similarity between coercive reciprocity and tying arrangements, both in form and in anticompetitive consequences, leads to the conclusion that the two practices should be judged by similar standards. Coercive reciprocity, in our view, is a form of tying and hence “fits” this category. See Gough v. Rossmoor Corp., 585 F.2d 381, 386 (9th Cir. 1978), cert. denied, 440 U.S. 936, 99 S.Ct. 1280, 59 L.Ed.2d 494 (1979) (this court stated that the first question to be answered is whether the restraint fits any of the four per se categories: horizontal and vertical price-fixing; horizontal market division; group boycotts or concerted refusals to deal; and tie-in sales). B. Application of the Per Se Analysis 1. Coercion U & I does not dispute that it had sufficient economic power in the tying product market to restrain appreciably the tied product market or that the amount of interstate commerce affected is not insubstantial. Rather, U & I maintains that, in fact, there is no tying arrangement because the contract “merely required its growers to use seed which would ‘produce beets having substantially the same characteristics’ as beets grown from U & I seed.” Since, growers were free to choose any sugar beet seed meeting this requirement, U & I argues, the crucial element of a per se illegal tie-in — coercion—is absent. U & I is correct in its assertion that “as long as ‘the buyer is free to take [or purchase or sell] either product by itself there is no tying problem.’ ” Moore v. Jas, H. Matthews & Co., 550 F.2d at 1216 (quoting Northern Pacific Railroad Co., 356 U.S. at 6 n.4, 78 S.Ct. at 518 n.4.). The undisputed evidence proffered here however, demonstrates that U & I had never approved, in fact, any other brand of sugar beet seed despite the fact that Betaseed’s HH7 variety was acceptable to U & I. U & I does not argue that no other seed was satisfactory; it merely asserts that since Betaseed was the only company that had requested approval, U & I never “had occasion to consider other varieties [except to reject]-Beta-seed’s inferior varieties.” Thus, U & I concludes that it did not actually coerce growers to buy U & I seed. In Moore, this court rejected the notion that, as a prerequisite to finding a tie, there must be a showing of actual coercion. We expressed the view that coercion may be implied from a showing that an appreciable number of buyers have accepted burdensome terms, such as a tie-in, and there exists sufficient economic power in the tying product market. 550 F.2d at 1217. “Coercion occurs when the buyer must accept the tied item and forgo possibly desirable substitutes.” Id. (citations omitted). Since U & I was the only sugar beet processor in the relevant market, it is clear that latter requirement is met. We believe that there is an issue of fact as to whether or not the former requirement has been met. There is evidence that U & I had been willing to accept the HH7 variety as part of an attempt to settle this action and that U & I did not believe that this variety would cause it financial ruin. U & I never communicated to growers its apparent approval of this variety. More importantly, aside from Betaseed’s seeds, there is no evidence that U & I found unsatisfactory all other varieties except its own varieties 3 and 8; yet, U & I never approved, for the regular contract, any other company’s seed. There also is evidence that growers had been dissatisfied with U & I’s seed, prior to Beta-seed’s entry into the Washington seed market. U & I subsequently improved its seed and growers attributed this to competition from Betaseed’s varieties. Growers also expressed concern that once the reality of competition was removed, U & I’s incentive to improve its product would dissipate. If this characterization of the arrangement at bar is proved, then it would demonstrate the principal evils of tie-ins: first, the growers, as buyers, were forced to forgo “shopping around” for the product of their choice; and, second, competitors in fact were foreclosed from the market for sugar beet seeds. Advance Business Systems & Supply Co. v. S. C. M. Corp., 415 F.2d 55 (4th Cir. 1969) illustrates that Betaseed’s evidence presented the district court with a factual dispute. There, the court rejected the defendant’s claim that an approved source clause saved a contract from being a tie-in. The defendant tied the sale of its service contracts to the sale of its supplies and paper. The contract stated that supplies “not approved” could not be used. In concluding that, in fact, a tie-in existed, the court stated, “[njotably, [the defendant] has never approved any competitive paper for use in [its] machines,” although the defendant knew other paper could be used. 415 F.2d at 65. Kentucky Fried Chicken v. Diversified Packaging, 549 F.2d 368 (5th Cir. 1977), a case relied upon by U & I, also illustrates the factual dispute here. There, the court considered a defense to an alleged tie-in based on lack of coercion. The Kentucky Fried Chicken’s (KFC) franchise agreements required the franchisee to purchase various supplies and equipment from KFC or from sources KFC approves in writing. The agreement provided that KFC’s approval would not be unreasonably withheld. If a franchisee wanted to obtain supplies from a source not previously given approval, KFC required that the supplier submit samples for testing. In upholding the district court’s finding that coercion, “a question of fact,” was absent, the reviewing court noted that the franchise agreements permitted the franchisees to purchase supplies from any source that KFC approved in writing and that, at the time of trial, there were ten approved sources from which to obtain supplies. 549 F.2d at 376-77. Significantly, franchisees could recommend additional sources and, by agreement, this approval could not unreasonably be withheld. “Of crucial importance” was the fact that KFC had never refused a request to approve a supplier. 549 F.2d at 373. Consequently, the franchise agreement did not require franchisees to take the tied product — supplies — from Kentucky Fried Chicken in order to obtain the tying product — the franchise. In fact, the franchisees need not have purchased any supplies from KFC. In concluding that there was no factual basis for finding a tie-in, the court noted that if it had been proved that Kentucky Fried Chicken in fact coerced franchisees into purchasing supplies from it, instead of approved sources, the per se tie-in doctrine would have applied. The court’s analysis included an examination of whether, on its face, the approved source arrangement, presented the principal evils associated with tie-ins: foreclosure of competitors in the tied market and denial to buyers of the advantages of shopping around to obtain the best product. Although competitors were subjected to an approval requirement, the record contained no showing that this requirement had, in practice, the effect of foreclosing competitors in the supplies market because KFC had never refused a request for approval of any competitor. Similarly, the franchisees retained the option to shop around for the best product. While the option was limited to approved sources, there were ten such sources and franchisees could nominate additional ones whenever they were found. Hence, the approved source arrangement did not present the principal evils of tie-ins that are the basis for applying the per se rule. It appears that, on its face, the arrangement before us is different from the arrangement described in KFC. There, the agreement provided that franchisees could suggest sources for approval and such approval could not be unreasonably withheld. Sources had been approved and no request for approval had ever been refused. Here, the agreement allows growers to use other companies’ seeds if it can be shown by “tests satisfactory to [U & I]” that seed is “substantially similar” to U & I’s seed. U & I never approved any other companies’ seed, even though it admitted that Beta-seed’s HH7 variety was acceptable. In writing, U & I informed growers that only U & I seed could be used for the 1976 crop because no other seed company had submitted tests for seed approval. After Beta-seed submitted its data U & I informed growers that Betaseed’s test results revealed that it was not substantially similar to U & I’s seed and therefore could not be used by growers. Although U & I had data on other companies’ seeds, it did not mention this data. There also appears to be a difference between the instant case and Kentucky Fried Chicken in terms of the underlying rationale for the other source clause. In Kentucky Fried Chicken, the court reasoned that the approved source clause protected KFC’s goodwill and enabled quality control. As a franchisor, its reputation depended on its franchisee’s performance. The trademark of a franchisee is relied upon by the public, and hence poor quality in goods sold by a single franchisee reflects upon the remaining franchisees as well as the franchisor. As a franchisor, KFC was entitled to insist upon reasonable standards. The counterclaimant neither contested this entitlement nor challenged the reasonableness of the standards set by KFC. In the instant case, U & I’s rationale for the clause was that it was necessary to prevent financial ruin. As a sugar beet processor forced to accept a skewed scale of payment, which was based on its own seed, U & I asserts that it was entitled to and had to adopt standards for using other companies’ seeds under the skewed payment scale. Unlike the counterclaimant in Kentucky Fried Chicken, Betaseed contests this entitlement and the reasonableness of the standards adopted by U & I. While in Kentucky Fried Chicken, the underlying rationale for the clause — protection of good will and quality control — was not the subject of dispute, here it is the focus of the dispute. We next examine this factual dispute in the context of U & I’s asserted business justification defense, bearing in mind that Betaseed has the burden of establishing a prima facie case of coercion. 2. Justification U & I asserts that it has a legitimate business interest in preventing the financial ruin of its business that would have resulted had U & I purchased, pursuant to the skewed payment scale, sugar beets with low-sugar-content grown from Betaseed’s seeds. U & I asserts both that it was forced to adopt the skewed scale and that it agreed to the scale because it was based on the reliable genetic characteristics of its own seed. To further its legitimate business objective, U & I contends it had no method less burdensome to commerce, save that adopted in the regular contract, since the WSBGA refused to approve the alternate contract. The alternate contract contained a payment scale based on the characteristics of Betaseed’s seed. According to this scale, growers received less money for the same amount of beets than under the regular contract’s payment scale. Betaseed first asserts that this justification, insofar as it depends on the act of another, is legally insufficient. Secondly, as discussed earlier, Betaseed maintains that the following is factually disputed: (1) whether the WSBGA forced U & I to adopt the skewed scale; (2) whether U & I agreed to the scale based on the reliability of its seed’s characteristics; (3) whether U & I adopted the restriction because it believed Betaseed’s seed is inferior to U & I seed and would cause it financial ruin; and (4) whether Betaseed’s seed is in fact inferior to U & I’s seed. Finally, Betaseed argues that the contract clause cannot be construed as a good faith use specification clause because it lacks objective standards for comparing U & I’s seeds to competitors’ seeds. Betaseed correctly states that U & I cannot insulate itself from liability by claiming that it was forced into the illegal conduct by another party. E.g., United States v. Loew’s, Inc., 371 U.S. 38, 51-52, 83 S.Ct. 97, 105, 9 L.Ed.2d 11 (1962) (fact that guarantor of loan required defendant to obtain the tie-in did not constitute a defense). Calnetics Corp. v. Volkswagen of America, Inc., 532 F.2d 674, 682 (9th Cir.), cert. denied 429 U.S. 940, 97 S.Ct. 355, 50 L.Ed.2d 309 (1976) (the involuntary nature of one’s participation in a conspiracy to monopolize is no defense; an antitrust conspirator can be liable although participation is involuntary). Unlike the defendants in these cases, U & I does not argue that WSBGA forced it to adopt the challenged illegal activity. Rather, U & I asserts that the WSBGA forced it to agree to the skewed payment scale and that therefore, this business or industry circumstance, coupled with the knowledge of Betaseed’s inferior seeds, left U & I no other choice but to adopt the challenged contract provision. In our view, the fact that U & I does not attempt to defend its actions by asserting that the WSBGA forced it to adopt an illegal tie-in distinguishes the case at bar from Loews and Calnetics. We agree with the court’s observations in Dehydrating Process Co. v. A. O. Smith Corp., 292 F.2d 658, 655 (1st Cir.), cert. denied, 368 U.S. 931, 82 S.Ct. 368, 7 L.Ed.2d 194 (1961), that articles though physically distinct may be related through circumstances. The sound business interests of a seller or processor, or a substantial hardship apart from the loss of a tie-in sale, may be such a circumstance. In Dehydrating Process, a manufacturer of storage equipment sold a patented silo and a patented unloader separately until customers expressed dissatisfaction with the unloader which had been purchased separately from the silo. This led the manufacturer to condition the sale of the unload-er on the sale of its installation of the unloader in an already owned or presently purchased silo. The manufacturer, however, did not require that purchasers of its silos also purchase its unloaders. The court upheld the practice, noting that if other silos were made to defendant’s specifications so that the unloader would properly function, then that policy requiring the use or purchase of its own equipment, as distinguished from others, may have been improper. Here, whether or not the skewed scale of payment is “a fact of market life,” remains a question of fact. U & I and the WSBGA apparently initially negotiated for the scale before 1973, when the contract required growers to use only U & I seed. U & I points to evidence that in subsequent negotiations, growers would not agree to change the scale of payment, while Betaseed points to evidence that, in later years, the growers agreed to a change in exchange for other concessions. Betaseed also refers to evidence that U & I did not begin requesting a change in the payment scale until 1976. Betaseed also points to evidence that the genetic characteristics of U & I seed are neither predictable nor reliable. Thus, Be-taseed argues, this .was not the reason why U & I initially agreed to the scale. Betaseed maintains that, rather than attempting to prevent financial ruin after discovering the alleged inferiority of Beta-seed’s seeds, U & I adopted these provisions because it had become concerned about Be-taseed’s penetration of the seed market. Betaseed points to evidence that U & I had been monitoring Betaseed’s sales and that U & I had formally studied the potential profits from sugar beet sales just prior to offering growers the alternate contract. Both parties refer to evidence of record to support their respective positions as to the inferiority of Betaseed’s seed and whether U & I would suffer financial ruin from purchasing such beets under the regular contract. It is not the role of this court to resolve the issues of credibility and fact in favor of either party: these issues must be resolved on remand at a trial in the district court. Betaseed also maintains that, given the unreliability of U & I’s seed as evidenced by the great variance in results obtained from one year’s production of seed to the next, U & I’s contract contained an illusory seed substitute specification clause. Other companies could not possibly comply with the clause, which permitted the use of a competitor’s seed if it was substantially similar to U & I seed, if they could not be sure which type or year of U & I’s seed was to be the basis of comparison. Consequently, competitors would be discouraged from submitting data. Betaseed also refers to admissions by U & I officers that U & I never developed any objective procedure for deciding whether competing seeds would be acceptable under the regular contract. U & I asserts that whether or not it developed objective standards is irrelevant because Betaseed’s seed is inferior to the seed of U & I. This argument presupposes that th’e skewed scale of payment was a fact of market life — a fact that remains disputed at this juncture. If it is determined by the trier of fact that U & I could have adopted an unskewed payment schedule, then the alleged inferiority of Beta-seed’s seeds, in terms of qualities important to a sugar beet processor, loses its significance. As U & I’s own documents show, what a sugar beet grower deems important in a sugar beet seed is different from that of a sugar beet processor. There is evidence in the record that many growers viewed Betaseed’s seed as superior to U & I’s seed. Relying on Moore v. Jas. H. Matthews & Co., 550 F.2d 1207, 1217 (9th Cir. 1977) and Siegel v. Chicken Delight, Inc., 448 F.2d 43, 50-52 (9th Cir. 1971), cert. denied, 405 U.S. 955, 92 S.Ct. 1172, 31 L.Ed.2d 232 (1972), U & I attempts to characterize the regular contract as one that provides reasonable guidelines and specifications for the use of substitute seed. In both Siegel and Moore, this court rejected the proferred quality control justification to a tie-in because each defendant had available to it an alternative which was less restrictive to competition than the tie-in: reasonable specifications for the use of a substitute. Moore involved several cemeteries that tied the sale of cemetery lots with the requirement that purchasers of markers buy the memorial from or through the cemetery and usé the installation service of the cemetery. We refused to justify the tie-in on quality control grounds because the cemeteries could control the quality of markers and the appearance of the cemetery grounds by specifying the types of markers to be used and by giving reasonable guidelines for their installation. We quoted the Supreme Court’s admonition that: