WYATT ENERGY, INC. v. MOTIVA ENTERPRISES, LLC, et al., SC 18811

Judicial District of Waterbury

     Antitrust; Gasoline; Whether Trial Court, for Purposes of its Antitrust Analysis, Applied the Proper Legal Standard in Defining the Relevant Product and Geographic Markets.  The defendant, Motiva Enterprises, LLC, is the assignee of an agreement (the agreement) granting it exclusive rights to use a gasoline distribution port terminal in New Haven owned by the plaintiff.  Subsequently, the defendant purchased a competing port terminal owned by Cargill, Inc. (Cargill terminal), and the plaintiff brought this action claiming that the defendant breached the agreement in doing so. The defendant counterclaimed, alleging that the plaintiff had wrongfully terminated the agreement when it sold its terminal to a third party without requiring that party to assume the plaintiff's obligations under the agreement.  In response to the counterclaim, the plaintiff asserted a special defense premised on alleged antitrust violations stemming from the defendant's purchase of the Cargill terminal.  The plaintiff claimed that, had it not terminated the agreement, it could have been found liable under the antitrust laws.  At trial, the plaintiff's expert, Michael Williams, testified that the defendant's acquisition of the Cargill terminal gave it substantial market or monopoly power, whereas the defendant's expert, Joseph Kalt, disagreed with that assessment.  The two experts’ antitrust analyses turned on how they defined the relevant product and geographic markets.  Williams defined the relevant product market as "terminalling services" only and the relevant geographic market as Connecticut.  On the other hand, Kalt defined the relevant product market as "terminalling services" and gasoline and the relevant geographic market as extending from the Northeast to the Gulf Coast.  The trial court, finding Kalt's testimony more credible, rejected the plaintiff's antitrust special defense, ruling that the defendant's acquisition of the Cargill terminal did not give it market or monopoly power that was violative of the antitrust laws.  Thereafter, the court found in favor of the defendant on its breach of contract counterclaim and awarded it damages.  On appeal, the plaintiff claimed, among other things, that the trial court, when conducting its antitrust analysis, applied an incorrect legal standard in defining the relevant markets.  The Appellate Court (128 Conn. App. 666) observed that the main thrust of the plaintiff's claim was that the trial court improperly rejected Williams' definitions of the relevant markets.  The court rejected the plaintiff's claim and affirmed the judgment, ruling that the trial court's decision to credit Kalt's definitions of the relevant markets, instead of Williams' definitions, was supported adequately by the evidence in the record.  The Supreme Court will now determine whether the Appellate Court properly concluded that the trial court applied the correct legal standard in defining the applicable product and geographic markets for purposes of its antitrust analysis.