COMPREHENSIVE SECURITY, INC.,
`et al.,
`
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`Plaintiffs,
`
`
`v.
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`METROPOLITAN GOVERNMENT OF
`NASHVILLE AND DAVIDSON
`COUNTY,
`
`
`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF TENNESSEE
`NASHVILLE DIVISION
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`
`
`No. 3:18-cv-00375
`
`
`
`
`Defendant.
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`
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`FINDINGS OF FACT AND CONCLUSIONS OF LAW
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`This antitrust case concerns private security services in Davidson County, Tennessee. For
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`years, private companies, including Plaintiffs, were the primary suppliers of private security
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`services in Davidson County. Those private companies hired off-duty Metropolitan Nashville
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`Police Department (“MNPD”) officers to provide part-time security services. Beginning in 2013,
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`MNPD started a five-year plan to transition the secondary employment of off-duty MNPD officers
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`away from private companies. As MNPD implemented this transition, it also decided to enter the
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`private security services market. In order to win business, MNPD lowered rates, changed
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`administrative procedures, and eventually prohibited off-duty MNPD officers from working for
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`private security companies. MNPD won a number of contracts previously held by private security
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`companies and became a significant player in the private security services market.
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`Plaintiffs allege a disruption caused by MNPD’s aggressive, competitive, and successful
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`entry into the private security services market. They argue that MNPD was successful through the
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`use of anticompetitive conduct in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2
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`(“Section 2”).1 A bench trial was held on November 12 through 16, 2020, (Doc. Nos. 138-140),
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`and the parties submitted post-trial briefs. (Doc. No. 137, 145, 146). The Court makes the
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`following Findings of Fact and Conclusions of Law in accordance with Rule 52(a) of the Federal
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`Rules of Civil Procedure.
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`FINDINGS OF FACT
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`The Private Security Services Market In Davidson County, Tennessee
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`1.
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`Plaintiffs are three long-established private security companies operating in
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`Davidson County, Tennessee. Comprehensive Security, Inc. (“Comprehensive”) is headed by
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`Loyd Poteete, a former MNPD officer. Associated Protected Services (“APS”) is owned by
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`Michael Woods, a former Millersville, Tennessee police officer. OnTrac Security is operated by
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`Ralph Douglas Jones, a formed MNPD sergeant.
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`2.
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`Plaintiffs offer traditional police and security services to the public, including site
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`security, asset security, traffic control, crowd control, individual protection and other similar
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`security services.
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`3.
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`In order to deliver police and other security services, Plaintiffs hire off-duty police
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`officers as part-time employees on an as-needed basis. (Doc. No. 138 at 16-26, 157-60). Those
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`off-duty officers are either commissioned by the Tennessee Peace Officer Standards & Training
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`Commission (“POST officers”) or without a POST commission. (Id. at 17-19, 26, 159-63, 191).
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`The distinction is significant because only POST officers can make arrests and direct traffic on
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`public streets. (Id. at 16; Doc. No. 139 at 26; Doc. No. 140 at 66). Most of the off-duty officers
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`typically work full-time for local and state governmental law enforcement agencies, such as
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`MNPD, and receive employment benefits and annual training through that employment. As a
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`1 Plaintiffs abandoned their Section 2 predatory pricing claim. (Doc. No. 145 at 2, 32).
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`result, private security companies benefit greatly from having access to trained off-duty officers
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`who desire sporadic, additional part-time work pay without incurring the training cost or other
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`costs associated with regular employees. (Doc. No. 139 at 116). Having this ready labor made it
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`easier for private security companies, like Plaintiffs, to fulfill their contractual security obligations
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`in Davidson County. (Doc. No. 138 at 171-72).
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`4.
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`MNPD facilitated the success of private security companies through secondary
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`employment policies and procedures. As far back as the 1990s, an MNPD officer who wanted to
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`work part-time for a private security company could submit a secondary employment work
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`request, known as a Form 150, and approval was “pretty much guaranteed.” (Doc. No. 138 at 173;
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`see also id. 51-52; Doc. No. 119-20). In 1997, MNPD created the Secondary Employment Unit
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`(“SEU”), to help MNPD officers obtain approval of secondary employment requests. The SEU
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`gave private security companies “very easy” access to a “great pool” of MNPD officers that were
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`“on standby constantly.” (Doc. No. 138 at 51-53, 172).
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`5.
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`The cooperative relationship between MNPD and private security companies
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`extended to Metro’s Special Events Committee, which consisted of representatives from the
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`Mayor’s Office, Public Works, Metro Parks, MNPD, Metro Fire, and special event coordinators.
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`The Committee’s responsibilities included the planning, permitting, and approval of special events
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`in Davidson County. (Id. at 37-38, 175; Doc. No. 139 at 57-58). The inclusion of Plaintiffs and
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`other private security companies reflected the then market reality that private security companies
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`did the “lion’s share of [the private security] work,” and were able to share their expertise on
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`security, road closures, and traffic control. (Doc. No. 139 at 58-59).
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`Chief Anderson’s Five-Year Transition Plan for MNPD
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`6.
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`In April 2013, then MNPD Chief Steve Anderson announced a five-year transition
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`plan to change “the future of secondary employment of [MNPD] police officers” and to ensure the
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`“safety” of citizens and visitors. (Ex. 68 at 2, 6). In an April 26, 2013 email to city officials, Chief
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`Anderson explained that “practices relating to the off-duty employment of police officers that were
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`in place 20 years ago would not be acceptable today.” (Id. at 2). He explained that there was “little
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`or no regulation or oversight as to how, or even where, officers used their police authority in off-
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`duty employment,” and that without “sufficient oversight, there is the real potential, and as we
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`have seen in other cities, [for] the reality of inappropriate conduct, favoritism, misbehavior and/or
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`corruption.” (Id.) He was committed to “improving accountability and reducing liability to the
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`city” by changing the availability and controls surrounding secondary employment of off-duty
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`MNPD officers. (Id.)
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`7.
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`Chief Anderson also determined that continued employment of MNPD officers by
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`private security companies had “the potential to divide an [MNPD] officer’s loyalties, create
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`conflicts of interest and otherwise have a detrimental effect on the operation of the Metropolitan
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`Government.” (Id. at 3). So, he decided to restrict officers’ secondary employment by requiring
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`that all private security services work be approved by MNPD. (Id.) This would enable MNPD to
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`“limit its liability and exercise sufficient control so as to minimize any detrimental impact
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`[secondary employment] can create.” (Id.) The change would also help MNPD become more
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`“professional [and] coordinated,” and “enhance public safety and service.” (Id. at 6).
`
`8.
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`The transition plan for MNPD officers’ secondary employment would occur over
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`five years to avoid any “outcry” over sudden change to an existing system “[e]ngrained into the
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`culture of Nashville.” (Id.) It was important to Chief Anderson that special event planners would
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`not hire MNPD officers directly unless the fees charged by MNPD were “reasonable and
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`affordable.” (Id. at 5). He explained that it was “imperative” that MNPD “give the Nashville
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`community and event organizers an affordable way to have Metropolitan Nashville police officers
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`staff their events.” (Id. at 5-6).
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`9.
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`MNPD Captain David Corman, the head of SEU from 2010 to 2019, was
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`responsible for implement Chief Anderson’s five-year transition plan. (Doc. No. 140 at 76).
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`10.
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`Beginning in April 2013, Corman began the process. First, the focus of SEU
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`changed to obtaining private security contracts for MNPD that could be directly staffed with
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`MNPD officers. (Doc. No. 139 at 37). MNPD Sergeant Kim Forsyth testified that Corman was
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`concerned that private security companies were using MNPD’s officers to make their own money,
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`and he became excited at the prospect of generating business for MNPD. (Id. at 37-38). Forsyth, a
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`witness offered by Plaintiffs, was very critical and accusatory of Corman. She believed that
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`Corman wanted to make as much money as possible for MNPD and operated SEU with the goal
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`of eliminating the work available to private security companies so that eventually they would be
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`forced out of business. At trial, she was nervous, unsure, fearful and contrived. She lacked any
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`direct or indirect knowledge about MNPD’s anti-competitive activities or motive. Instead, her
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`testimony consisted of aggressive, prepackaged speeches that were often not responsive to
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`questions. Overall, the Court found Forsyth not credible, and likely influenced by personal feelings
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`about Corman.
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`11.
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`Second, Corman implemented administrative changes to add “more structure” and
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`“more oversight” to the Form 150 process for approving secondary requests. (Doc. No. 140; see
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`also Doc. No. 138 at 51-57, 173-75). For example, MNPD required multiple escalating levels of
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`approval – first by the captain or precinct commander, then by the head of SEU, and eventually by
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`Chief Anderson. (Doc. No. 54-55, 173). MNPD also made a determination on each private security
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`work opportunity to access whether it was “worthwhile.” (Id. at 173-74). As a result, it became
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`more difficult to get Form 150 approvals, and private security companies began to rely more on
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`non-MNPD officers. (Id. at 78-80, 87-90).
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`12.
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`Third, the five-year transition plan also changed the operation of the Special Events
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`Committee. No longer were private security companies, like Plaintiffs, invited by Metro to attend
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`meetings. Instead, they had to be invited by special event planners to discuss individual projects.
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`(Id. at 69-70, 195-97; Doc. No. 140 at 140-41). The most significant change occurred when MNPD
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`began promoting itself to special event planners to provide private security services for their
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`events. (Doc. No. 138 at 176, 196; Doc. No. 139 at 71-72). As Michael Woods of Plaintiff APS
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`conceded, MNPD was merely “let[ting] [event organizers] know they had other options.” (Doc.
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`No. 138 at 198).
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`13.
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`Between 2013 and 2018, Plaintiffs, and other private security companies, felt the
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`impact of MNPD entrance into the private security market. In their case-in-chief, Plaintiffs painted
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`an impressive picture through multiple private security companies who told stories of losing
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`business to MNPD. According to them, MNPD used the Special Events Committee, control over
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`the availability of off-duty MNPD offers through the Form 150 process, the parade permit process
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`and the approval process for road closure to systemically take business that previously went to
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`Plaintiffs and other private security companies. A few examples illustrate MNPD’s takeover of the
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`customer base for the private security market:
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`• For many years, Patrick McKellar and his company provided security for the annual
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`Iroquois Steeplechase event, until he lost that work to MNPD.
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`• George H. Curry, Jr. provided security services for all events at the Ryman
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`Auditorium and the Grand Ole Opry House until he lost that work to Ryman’s in-
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`house security force in 2018 because he could no longer employ MNPD officers.
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`• Doug Jones provided security services for TriStar Hospitals, which are part of the
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`HCA family of companies. His contract approached 1 million dollars and was lost
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`to MNPD in 2018.
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`• Also in 2018, Chaz Vetter, owner of Premier Protective Services, Inc., provided
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`security services to the State Fairgrounds for at least six years until he lost that work
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`to MNPD.
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`• Comprehensive, owned by Loyd Poteete, lost its customer, the Nashville Pride
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`Festival to MNPD, which provided security services for free.
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`• APS, owned by Michael Woods, lost work for the Nashville Pride Festival and the
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`Nashville Christmas Parade to MNPD.
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`Completion of the Five-Year Transition Plan
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`14.
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`On March 2, 2018 – almost exactly five years after announcing the five-year
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`transition plan – Chief Anderson issued a memorandum ending MNPD’s approval of MNPD
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`officers’ requests to perform off-duty work for private security companies. (Ex. 6; Doc. No. 138
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`at 60-61; Doc. No. 139 at 14). This effectively ended Plaintiffs’ ability to hire off-duty MNPD
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`officers to staff their private security services contracts. Now, Plaintiffs had to use non-MNPD
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`officers. (Doc. No. 138 at 90-94).
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`15.
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`As a result, SEU now “operate[s] the same way” as a private security company and
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`“provide[s] businesses or individuals an opportunity to hire [MNPD] police officers” for private
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`security services. (Doc. No. 140 at 36, 113). SEU has been very successful. (Doc. No. 139 at 47,
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`49, 81-82). MNPD has obtained a number of significant contracts previously held by Plaintiffs and
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`other private security companies. In some cases, MNPD even offered free or discounted private
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`security services to the public. (Doc. No. 138 at 28-32; 178-80).
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`16. MNPD rates for private security services reflects its entrance into, and competition
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`within, the private security market. From 2009 until 2013, Metro’s range for hourly services
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`ranged from $66.00 per hour to $116.00 per hour, much higher than the private security companies.
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`Ex. 61 at 1. But in 2013, when MNPD began to implement Chief Anderson’s five-year transition
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`plan, MNPD lowered the range to $40.00 per hour to $75.00 per hour. (Id.) There was a small
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`increase in 2017 to a range of $44.50 per hour to $79.50 per hour, encompassing completion of
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`the five-year plan in 2018. (Id. at 2.) Finally, in 2020 to 2021, after MNPD had obtained many of
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`Plaintiffs’ and other private security companies’ clients, the range had a modest increase to $46.50
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`per hour to $79.50 per hour. (Id.)
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`Expert Opinions
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`17.
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`At trial, the Court qualified two witnesses as experts under Federal Rule of
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`Evidence 702: Dr. Gilbert Mathis, Professor Emeritus of Economics at Murray State University,
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`on behalf of Plaintiffs (Ex. 40), Dr. Charles L. Baum II, Professor of Economics at Middle
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`Tennessee State University, a rebuttal expert on behalf of Defendant. (Ex. 60). Having considered
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`the testimony of both, the Court gives little weight to Dr. Mathis’s opinions because the Court
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`finds them to be flawed due to incomplete analysis.
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`18.
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`Dr. Mathis opined that MNPD was anticompetitive when it reduced the available
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`labor pool needed by Plaintiffs and other private security companies to compete in the private
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`security services market. According to Dr. Mathis, MNPD increased market power and decreased
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`competition when it restricted off-duty MNPD officers from working for Plaintiffs.
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`19.
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`The Court concludes that Dr. Mathis’s opinion is unreliable. (Doc. No. 139 at 136-
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`47, 176-79). First, Dr. Mathis analyzed the wrong market. As credibly explained by Dr. Baum, Dr.
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`Mathis failed to analyze the sell-side market for the supply of private security services that is the
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`basis of Plaintiffs’ claim. (Doc. No. 139 at 152). Indeed, contrary to Plaintiffs’ own legal
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`arguments, Dr. Mathis insisted that this case concerns buyers, not sellers. (Doc. No. 138 at 120-
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`21). Dr. Mathis compounded this error by rejecting, contrary to the evidence at trial, that the
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`“buyers” relevant to private security services are special event planners and organizers. Instead,
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`Dr. Mathis devised a market in which the buyers are private security companies and the product is
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`off-duty officers employed by law enforcement agencies. (Id. at 112, 121-22; Ex. 40 at 1-3).
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`Because his “labor pool” market focus bears no resemblance to the private security service supply
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`market at issue in this case, Dr. Baum concluded that Dr. Mathis failed to demonstrate that MNPD
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`had market power. (Doc. No. 139 at 133, 137-38). The Court agrees that the labor pool market
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`analysis offers little insight into MNPD’s alleged anticompetitive behavior in the supply-side
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`security service market.
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`20.
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`Even if the labor pool market analysis were relevant, Dr. Mathis used untenable
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`assumptions that undercut his conclusions. In particular, Dr. Mathis did not include all available
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`off-duty officers such as non-POST officers, retired POST officers, Tennessee Highway Patrol
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`officers, and officers in nearby counties. (Id. at 136-47, 190-91). His contrary assumptions are
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`wholly unsupported by the evidence at trial. Rather, the evidence at trial establishes that private
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`security companies routinely hire non-POST officers, retired POST officers, THP officers, and
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`POST officers from law enforcement agencies in geographically distant counties, including as far
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`as Alabama. (Doc. No. 138 at 17-22, 26, 58, 87, 90-91, 163, 191; Doc. No. 139 at 100; Doc. No.
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`140 at 144). Moreover, Dr. Mathis acknowledged making no attempt to ascertain how many
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`MNPD officers are willing or able to work for private security companies. (Doc. No. 138 at 127-
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`29). Indeed, Dr. Mathis conceded at trial that he did not consider much of the available information
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`about private security companies’ labor force; that it was reasonable to consider such data; and
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`that correcting his assumptions with such data would alter his conclusions. (Id. at 114; 118-20;
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`125-30).
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`21.
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`The HHI value calculated by Dr. Mathis is also unreliable. The HHI, typically used
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`to evaluate a market in a merger case, has more limited utility in a Section 2 case concerned with
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`the market power of a single firm. Moreover, Dr. Mathis’s method for calculating the HHI value
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`likely overstated the results. Again, as Dr. Baum credibly explained, Dr. Mathis considered all of
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`the POST officers in five counties as one “unit,” instead of following standard principles and
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`squaring the shares of the employers that supply POST officers in each county. (Doc. No. 139 at
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`176-83). “[L]umping all the firms in a county together and consider[ing] that to be one entity”
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`makes the labor pool “seem way more concentrated than it really is.” (Id.)
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`22.
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`Finally, Dr. Mathis assumes that the “reasonable available” labor pool for private
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`security companies includes MNPD, but he concedes that MNPD is not obligated to make its
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`officers available to private security companies at all. (Doc. No. 138 at 136-37). In rebuttal, Dr.
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`Baum stressed that Dr. Mathis failed to acknowledge that “there is no economic theory . . . that
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`says it’s somehow anticompetitive for a company to not allow its workers to work for another
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`company.” (Doc. No. 139 at 135-36). Dr. Mathis compounded this error by failing to ever consider
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`the stated purposes for Chief Anderson’s MNPD secondary employment transition plan. (Doc. No.
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`138 at 140). As a result, the labor pool market analysis entirely fails to take into account MNPD’s
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`alternate reasons for limiting the outside work of its officers, including “provid[ing] better security
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`and control[ling] MNPD’s public image.” (Doc. No. 139 at 168, 187).
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`CONCLUSIONS OF LAW
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`Antitrust Law and the Sherman Act
`
`1.
`
`The antitrust laws protect “competition, not competitors.” Brown Shoe Co. v.
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`United States, 370 U.S. 294, 320 (1962). To violate the Sherman Act, a firm must engage in
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`anticompetitive conduct “designed to destroy competition, not just to eliminate a competitor.”
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`Richter Concrete Corp. v. Hilltop Concrete Corp., 691 F.2d 818, 823 (6th Cir. 1982). Congress
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`authorized Sherman Act scrutiny of a single firm only when the firm poses a danger of
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`monopolization. This strict focus “reduces the risk that the antitrust laws will dampen the
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`competitive zeal of a single aggressive entrepreneur.” Copperweld Corp. v. Independence Tube
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`Corp., 467 U.S. 752, 768 (1984). Section 2 thus prohibits only monopolizing, attempting to
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`monopolize, or conspiring with others to monopolize, commerce.2 15 U.S.C. § 2; Superior Prod.
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`P’ship v. Gordon Auto Body Parts Co., 784 F.3d 311, 318 (6th Cir. 2015).
`
`2.
`
`To prove monopolization, a plaintiff must prove that a firm: (1) “possess[ed]
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`monopoly power in a relevant market”; (2) “willful[ly] acqui[red], maint[ained], or use[d] [ ] that
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`power by anti-competitive or exclusionary means as opposed to ‘growth or development resulting
`
`from a superior product, business acumen, or historic accident,’” Conwood Co. v. U.S. Tobacco
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`Co., 290 F.3d 768, 782 (6th Cir. 2002) (quoting Aspen Skiing Co. v. Aspen Highlands Skiing
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`Corp., 472 U.S. 585, 595-96 (1985)); and (3) had a general intent to exclude others from the
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`market. Superior Prod. P’ship, 784 F.3d at 319 (quoting Conwood, 290 F.3d at 782).
`
`
`2 The Clayton Act provides the vehicle to sue for redress under Section 2. Section 16 of the Clayton
`Act provides in part that “[a]ny person, firm, corporation, or association shall be entitled to sue for
`and have injunctive relief . . . against threatened loss or damage by a violation of the antitrust
`laws[.]” 15 U.S.C. § 26.
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`3.
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`To prove attempted monopolization, a plaintiff must prove that a firm: (1) “with a
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`dangerous probability of success, engage[d] in anti-competitive practices the specific design of
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`which [was] to build a monopoly or exclude or destroy competition”; and (2) had a “specific intent
`
`to destroy competition or build a monopoly.”3 Conwood, 290 F.3d at 782 (quoting Smith v. N.
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`Mich. Hosps., Inc., 703 F.2d 942, 954 (6th Cir. 1983)); Superior Prod. P’ship, 784 F.3d at 319;
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`Arthur S. Langenderfer, Inc. v. S.E. Johnson Co., 917 F.2d 1413, 1431-32 (6th Cir. 1990). To
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`satisfy the “dangerous probability of success” element, a firm must demonstrably “possess market
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`strength that approaches monopoly power.” Langenderfer, 917 F.2d at 1431-32; Tarrant Serv.
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`Agency, Inc. v. Am. Standard, Inc., 12 F.3d 609, 615 (6th Cir. 1993).
`
`4.
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`Consideration of every Section 2 claim begins with two threshold issues: (1) the
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`definition of “the relevant product and geographic markets” in which the plaintiffs compete with
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`the defendant, and (2) whether the defendant, “in fact, possesses monopoly power.” Spirit Airlines,
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`Inc. v. Northwest Airlines, Inc., 431 F.3d 917, 932 (6th Cir. 2005) (quoting Conwood, 290 F.3d at
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`782); see also United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 395 (1956); Hand v.
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`Cent. Transp., Inc., 779 F.2d 8, 11 (6th Cir. 1985).
`
`5.
`
`The proof at trial established, by a preponderance of the evidence, that Plaintiffs
`
`and other private security companies primarily used full-time MNPD officers and other law
`
`enforcement officers to supply the labor necessary to staff their for-profit companies providing
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`security services to the public. They relied greatly upon MNPD. Their business model worked well
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`because MNPD hired, trained, paid, and controlled their labor source with no direct costs to
`
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`3 Specific intent may be inferred from evidence of anticompetitive conduct, Langenderfer, 917
`F.2d at 1432, and courts have found “[i]mproper exclusion . . . is always deliberately intended.”
`Spirit Airlines v. NW Airlines, Inc., 431 F.3d 917, 932 (6th Cir. 2005)(citing Aspen Skiing, 472
`U.S. at 603).
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`Plaintiffs. Then, in 2013, MNPD changed its administration of its employees. MNPD decided that
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`more management and control was needed to maintain MNPD standards when its employees
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`engaged in off-duty secondary employment. Recognizing that some MNPD officers wanted and
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`needed part-time work for additional pay, MNPD entered the private security services market
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`using its employees. Plaintiffs’ claims that MNPD’s decision to compete with Plaintiffs is a
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`violation of the antitrust laws is fundamentally flawed. Nothing in Section 2 of the Sherman Act
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`requires MNPD to make its employees available to a for-profit company. Nothing in Section 2 of
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`the Sherman Act requires MNPD to refrain from competing against Plaintiffs in the private
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`security market. Nothing in Section 2 of the Sherman Act makes illegal MNPD decision to
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`compete against Plaintiff. And, certainly nothing in Section 2 of the Sherman Act requires MNPD
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`to help its competition once MNPD enters the market. For the reasons that follow, there is no
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`violation of Section 2 of the Sherman Act in this case.
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`Market Definition
`
`6.
`
`Plaintiffs must first accurately define the relevant market in which they compete
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`with MNPD. Worldwide Basketball & Sport Tours, Inc. v. Nat’l Collegiate Athletic Ass’n, 388
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`F.3d 955, 962 (6th Cir. 2004); see also In re Se. Milk Antitrust Litig., 801 F. Supp. 2d 705, 724
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`(E.D. Tenn. 2011). The relevant market consists of two components: (1) product or service market,
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`and (2) geographic market. Brown Shoe, 370 U.S. at 324; Spirit Airlines, 431 F.3d at 932-33; In
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`re Se. Milk, 801 F. Supp. 2d at 724. Here, by a preponderance of the evidence, it is apparent that
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`Plaintiffs, MNPD, and other private security companies compete primarily in the Nashville,
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`Davidson County, Tennessee market in the private security market.
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`7.
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`Plaintiffs contend that the appropriate service market is the supply of private
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`security services “that require POST-commissioned officers.” (Doc. No. 132 at 2; Doc. No. 145 at
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`¶ 206). However, Plaintiffs have not proven this narrow definition by a preponderance of the
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`evidence. First, Plaintiffs have offered no antitrust analysis to support the definition. Dr. Mathis
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`disagreed with the definition entirely and offered no relevant analysis of any supply market. And
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`Plaintiffs presented no qualitative information to support the definition (e.g., data regarding the
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`number and size of market participants; specific services supplied in the market; cross-elasticity;
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`firms that have left the market; firms that could enter the market; barriers to entry, etc.) Indeed,
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`Dr. Baum credibly opined that Plaintiffs did not even collect the appropriate data to analyze the
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`supply market. (Doc. No. 139 at 139, 152).
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`Monopoly Power
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`8.
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`The Court next considers the “critical factor” of whether MNPD has monopoly
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`power in the relevant market. Byars v. Bluff City News Co., 609 F.2d 843, 850 (6th Cir. 1979)
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`(citing American Tobacco Co. v. United States, 328 U.S. 781, 813-14 (1946)). A single seller has
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`monopoly power when it is able to raise prices or exclude competition when it desires to do so.
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`Eastman Kodak Co. v. Image Tech. Servs., 504 U.S. 451, 464 (1992) (quoting Fortner Enters., Inc.
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`v. U.S. Steel Corp., 394 U.S. 495, 503 (1969)); see also E.I. du Pont, 351 U.S. at 391.
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`9.
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`“The existence of [monopoly] power ordinarily is inferred from the seller’s
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`possession of a predominant share of the [relevant] market.” Spirit Airlines, 431 F.3d at 935
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`(quoting Eastman Kodak, 504 U.S. at 464). Although Section 2 does not contain a specific
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`percentage of market share that triggers an inference of monopoly power, courts have adopted a
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`standard that is “very high.” In re Se. Milk, 801 F. Supp. 2d at 725 (citing Smith Wholesale Co.,
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`Inc. v. Philip Morris USA, Inc., 219 F. App’x 398, 409 (6th Cir. 2007)). In particular, the Sixth
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`Circuit typically infers monopoly power “where the market share is 75-80% or greater.” Byars,
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`609 F.2d at 850 (emphasis added). The Sixth Circuit has also endorsed Judge Learned Hand’s
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`“classic explanation” of market share sufficient to constitute monopoly power: “over ninety . . .
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`percentage [market share] is enough to constitute a monopoly; it is doubtful whether sixty or sixty-
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`four percent would be enough; and certainly thirty-three percent is not.” Spirit Airlines, 431 F.3d
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`at 935 (emphasis added) (quoting United States v. Aluminum Co. of America, 148 F.2d 416, 424
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`(2d Cir. 1945)).
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`10.
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`The Sixth Circuit has also taken a demanding approach to whether a plaintiff has
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`demonstrated market share “approach[ing] monopoly power” sufficient to satisfy the “dangerous
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`probability of success” element of an attempted monopolization claim. Langenderfer, 917 F.2d at
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`1431-32; Tarrant, 12 F.3d at 615. Twice, the court has held that a market share between 30 and 40
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`percent was insufficient evidence that a firm had even the capacity to monopolize. See Richter,
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`691 F.2d at 826; Langenderfer, 917 F.2d at 1431.
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`11.
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`Plaintiffs have not established MNPD’s market share. As discussed above, Dr.
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`Mathis conducted a “buy-side” study of a “reasonable labor pool” that offers no insight into
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`MNPD’s share of the relevant sell-side market. Moreover, even if Dr. Mathis’s labor pool analysis
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`were relevant and reliable, it is insufficient to demonstrate monopoly power because MNPD’s
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`“share” is below the high threshold required under Section 2. Byars, 609 F.2d at 850. Indeed, Dr.
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`Mathis implicitly acknowledged this shortfall by concluding that MNPD has only “considerable
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`market power,” not monopoly power. (See Ex. 40 at 3-4). Finally, Plaintiffs’ anecdotal evidence
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`at trial concerning MNPD’s performance in the relevant market does not alone support a finding,
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`of monopoly power. Accordingly, Plaintiffs have failed to prove, by a preponderance of the
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`evidence, that MNPD possesses sufficient market share for the Court to infer the existence of
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`monopoly power in the relevant market.
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`Anticompetitive Conduct
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`12.
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`Even if Plaintiffs had met their burden regarding monopoly power in the relevant
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`market, their Section 2 claims still fail because Plaintiffs have not proven that MNPD engaged in
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`anticompetitive conduct. There is insufficient proof that MNPD “willful[ly] acqui[red],
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`maint[ained], or use[d] [monopoly] power by anti-competitive or exclusionary means as opposed
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`to ‘growth or development resulting from a superior product, business acumen, or historic
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`accident,’” or “engage[d] in anti-competitive practices the specific design of which [was] to build
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`a monopoly or exclude or destroy competition.” Conwood, 290 F.3d at 782 (quoting Aspen Skiing,
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`472 U.S. at 595-96 and Smith, 703 F.2d at 954); see also Superior Prod. P’ship, 784 F.3d at 319.
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`Neither have Plaintiffs proved that MNPD engaged in other anticompetitive behavior designed to
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`destroy competition. See Richter, 691 F.2d at 823 (explaining that anticompetitive conduct is
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`“designed to destroy competition, not just to eliminate a competitor”).
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`13.
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`This Court does not find that Chief Anderson’s five-year transition plan was
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`intended to “destroy competition.” His plan was largely inward-looking and concerned MNPD and
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`MNPD officers. (See Ex. 68). Chief Anderson outlined specific and credible business reasons and
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`police powers for the transition plan, including that MNPD sought better control over its own
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`officers; better management of its reputation; limitation of complaints; improved training and risk
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`management; and a better ability to provide for the public safety. Likewise, Plaintiffs offered
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`insufficient evidence that changes to the Special Events Committee meetings were intended to
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`“destroy competition.” In shor