ZF Meritor LLC v. Eaton Corporation

*263OPINION OF THE COURT

This case arises from an antitrust action brought by ZF Meritor, LLC (“ZF Meritor”) and Meritor Transmission Corporation (“Meritor”) (collectively, “Plaintiffs”) against Eaton Corporation (“Eaton”) for allegedly anticompetitive practices in the heavy-duty truck transmissions market. The practices at issue are embodied in long-term agreements between Eaton, the leading supplier of heavy-duty truck transmissions in North America, and every direct purchaser of such transmissions. Following a four-week trial, a jury found that Eaton’s conduct violated Section 1 and Section 2 of the Sherman Act, and Section 3 of the Clayton Act. Eaton filed a renewed motion for judgment as a matter of law, arguing that its conduct was per se lawful because it priced its products above-cost. The District Court disagreed, reasoning that notwithstanding Eaton’s above-cost prices, there was sufficient evidence in the record to establish that Eaton engaged in anticompetitive conduct — specifically that Eaton entered into long-term de facto exclusive dealing arrangements— which foreclosed a substantial share of the market and, as a result, harmed competition. We agree with the District Court and will affirm the District Court’s denial of Eaton’s renewed motion for judgment as a matter of law.

We are also called upon to address several other issues. Although the jury returned a verdict in favor of Plaintiffs on the issue of liability, prior to trial, the District Court granted Eaton’s motion to exclude the damages testimony of Plaintiffs’ expert. The District Court also denied Plaintiffs’ request for permission to amend the expert report to include alternate damages calculations. Consequently, the issue of damages was never tried and no damages were awarded. Plaintiffs cross-appeal from the District Court’s order granting Eaton’s motion to exclude and the District Court’s subsequent denial of Plaintiffs’ motion for clarification. For the reasons set forth below, we will affirm the District Court’s orders to the extent that they excluded Plaintiffs’ expert’s testimony based on the damages calculations in his initial expert report, but reverse to the extent that the District Court denied Plaintiffs’ request to amend the report to submit alternate damages calculations. Finally, although the District Court awarded no damages, it did enter injunctive relief against Eaton. On appeal, Eaton argues that Plaintiffs lack standing to seek injunctive relief because they are no longer in the heavy-duty truck transmissions market, and have expressed no concrete desire to re-enter the market. We agree and will vacate the District Court’s order issuing injunctive relief.

I. BACKGROUND

A. Factual Background

1. Market Background

The parties agree that the relevant market in this case is heavy-duty “Class 8” truck transmissions (“HD transmissions”) in North America. Heavy-duty trucks include 18-wheeler “linehaul” trucks, which are used to travel long distances on highways, and “performance” vehicles, such as cement mixers, garbage trucks, and dump trucks. There are three types of [¶] transmissions: three-pedal manual, which uses a clutch to change gears; two-pedal automatic; and two-or-three-pedal automated mechanical, which engages the gears mechanically through electronic controls. Linehaul and performance trans*264missions, which comprise over 90% of the market, typically use manual or automated mechanical transmissions.1

There are only four direct purchasers of [¶] transmissions in North America: Freightliner, LLC (“Freightliner”), International Truck and Engine Corporation (“International”), PACCAR, Inc. (“PAC-CAR”), and Volvo Group (“Volvo”). These companies are referred to as the Original Equipment Manufacturers (“OEMs”). The ultimate consumers of [¶] transmissions, truck buyers, purchase trucks from the OEMs. Truck buyers have the ability to select many of the components used in their trucks, including the transmissions, from OEM catalogues called “data books.” Data books list the alternative component choices, and include a price for each option relative to the “standard” or “preferred” offerings. The “standard” offering is the component that is provided to the customer unless the customer expressly designates another supplier’s product, while the “preferred” or “preferentially-priced” offering is the lowest priced component in data book among comparable products. Data book positioning is a form of advertising, and standard or preferred positioning generally means that customers are more likely to purchase that supplier’s components. Although customers may, and sometimes do, request components that are not published in a data book, doing so is often cumbersome and increases the cost of the component. Thus, data book positioning is essential in the industry.

Eaton has long been a monopolist in the market for [¶] transmissions in North America.2 It began making [¶] transmissions in the 1950s, and was the only significant manufacturer until Meritor entered the market in 1989 and began offering manual transmissions primarily for line-haul trucks. By 1999, Meritor had obtained approximately 17% of the market for sales of [¶] transmissions, including 30% for linehaul transmissions. In mid-1999, Meritor and ZF Friedrichshafen (“ZF AG”), a leading supplier of [¶] transmissions in Europe, formed the joint venture ZF Meritor, and Meritor transferred its transmissions business into the joint venture.3 Aside from Meritor, and then ZF Meritor, no significant external supplier of [¶] transmissions has entered the market in the past 20 years.4

One purpose of the ZF Meritor joint venture was to adapt ZF AG’s two-pedal automated mechanical transmission, ASTronic, which was used exclusively in Europe, for the North American market. The redesign and testing took 18 months, and ZF Meritor introduced the adapted ASTronic model into the North American market in 2001 under the new name FreedomLine. FreedomLine was the first two-pedal automated mechanical transmission to be sold in North America.5 When FreedomLine was released, Eaton projected that automated mechanical transmissions would account for 30-50% of the market for all [¶] transmission sales by 2004 or 2005.

*265 2. Eaton’s Long-Term, Agreements

In late 1999 through early 2000, the trucking industry experienced a 40-50% decline in demand for new heavy-duty trucks. Shortly thereafter, Eaton entered into new long-term agreements (“LTAs”) with each OEM. Although long-term supply contracts were not uncommon in the industry, and were also utilized by Meritor in the 1990s, Eaton’s new LTAs were unprecedented in terms of their length and coverage of the market. Eaton signed LTAs with every OEM, and each LTA was for a term of at least five years.

Although the LTAs’ terms varied somewhat, the key provisions were similar. Each LTA included a conditional rebate provision, under which an OEM would only receive rebates if it purchased a specified percentage of its requirements from Eaton.6 Eaton’s LTA with Freightliner, the largest OEM, provided for rebates if Freightliner purchased 92% or more of its requirements from Eaton.7 Under Eaton’s LTA with International, Eaton agreed to make an up-front payment of $2.5 million, and any additional rebates were conditioned on International purchasing 87% to 97.5% of its requirements from Eaton. The PACCAR LTA provided for an up-front payment of $1 million, and conditioned rebates on PACCAR meeting a 90% to 95% market-share penetration target. Finally, Eaton’s LTA with Volvo provided for discounts if Volvo reached a market-share penetration level of 70% to 78%.8 The LTAs were not true requirements contracts because they did not expressly require the OEMs to purchase a specified percentage of their needs from Eaton. However, the Freightliner and Volvo LTAs gave Eaton the right to terminate the agreements if the share penetration goals were not met. Additionally, if an OEM did not meet its market-share penetration target for one year, Eaton could require repayment of all contractual savings.

Each LTA also required the OEM to publish Eaton as the standard offering in its data book, and under two of the four LTAs, the OEM was required to remove competitors’ products from its data book entirely. Freightliner agreed to exclusively publish Eaton transmissions in its data books through 2002, but reserved the right to publish ZF Meritor’s FreedomLine through the life of the agreement. In 2002, Freightliner and Eaton revised the LTA to allow Freightliner to publish other competitors’ transmissions, but the revised LTA provided that Eaton had the right to “renegotiate the rebate schedule” if Freightliner chose to publish a competitor’s transmission. Subsequently, Freightliner agreed to a request by Eaton to remove FreedomLine from all of its data books. Eaton’s LTA with International also required that International list exclusively Eaton transmissions in its elec*266tronic data book. International did, however, publish ZF Meritor’s manual transmissions in its printed data book. The Volvo and PACCAR LTAs did not require that Eaton products be the exclusive offering, but did require that Eaton products be listed as the preferred offering. Both Volvo and PACCAR continued to list ZF Meritor’s products in their data books. In the 1990s, Meritor’s products were listed in all OEM component data books, and in some cases, had preferred positioning.

The LTAs also required the OEMs to “preferential price” Eaton transmissions against competitors’ equivalent transmissions. Eaton claims that it sought preferential pricing to ensure that its low prices were passed on to truck buyers. However, there were no express requirements in the LTAs that savings be passed on to truck buyers (i.e., that Eaton’s prices be reduced) and there is evidence that the “preferential pricing” was achieved by both lowering the prices of Eaton’s products and raising the prices of competitors’ products. Eaton notes that it was “common” for price savings to be passed down to truck buyers, and a Volvo executive testified that some of the savings from Eaton products were passed down while others were kept to improve profit margins. Plaintiffs, however, emphasize that according to an email sent by Eaton to Freightliner,. the Freightliner LTA required .that ZF Meritor’s products be priced at a $200 premium over equivalent Eaton products. Likewise, International agreed to an “artificialf ] penal[ty]” of $150 on all of ZF Meritor’s transmissions as of early 2003, and PACCAR imposed a penalty on customers who chose ZF Meritor’s products.

Finally, each LTA contained a “competitiveness” clause, which permitted the OEM to purchase transmissions from another supplier if that supplier offered the OEM a lower price or a better product, the OEM notified Eaton of the competitor’s offer, and Eaton could not match the price or quality of the product after good faith efforts. The parties dispute the significance of the “competitiveness” clauses. Eaton maintains that Plaintiffs were free to win the OEMs’ business simply by offering a better product or a lower price, while Plaintiffs argue and presented testimony from OEM officials that, due to Eaton’s- status as a dominant supplier, the competitiveness clauses were effectively meaningless.

3. Competition under the LTAs and Plaintiffs’ Exit from the Market

After Eaton entered into its LTAs with the OEMs, ZF Meritor shifted its marketing focus from the OEM level to a strategy targeted at truck buyers. Also during this time period, both ZF Meritor and Eaton experienced quality and performance issues with their transmissions. For example, Eaton’s Lightning transmission, which was an initial attempt by Eaton to compete with FreedomLine, was “not perceived as a good [product]” and was ultimately taken off the market. ZF Meritor’s Freedom-Line and “G Platform” transmissions required frequent repairs, and in 2002 and 2003, ZF Meritor faced millions of dollars in warranty claims.

During the life of the LTAs, the OEMs worked with Eaton to develop a strategy to combat ZF Meritor’s growth. On Eaton’s urging, the OEMs imposed additional price penalties on customers that selected ZF Meritor products, “force fed” Eaton products to customers, and sought to persuade truck fleets using ZF Meritor transmissions to shift to Eaton transmissions. At all times relevant to this case, Eaton’s average prices were lower than Plaintiffs’ average prices, and on several occasions, Plaintiffs declined to grant price conces*267sions requested by OEMs. Although Eaton’s prices were generally lower than Plaintiffs’ prices, Eaton never priced at a level below its costs.

By 2003, ZF Meritor determined that it was limited by the LTAs to no more than 8% of the market, far less than the 30% that it had projected at the beginning of the joint venture. ZF Meritor officials concluded that the company could not remain viable with a market share below 10% and therefore decided to dissolve the joint venture. After ZF Meritor’s departure, Meritor remained a supplier of [¶] transmissions and became a sales agent for ZF AG to ensure continued customer access to the FreedomLine. However, Meritor’s market share dropped to 4% by the end of fiscal year 2005, and Meritor exited the business in January 2007.

B. Procedural History

On October 5, 2006, Plaintiffs filed suit against Eaton in the U.S. District Court for the District of Delaware, alleging that Eaton used unlawful agreements in restraint of trade, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; acted unlawfully to maintain a monopoly, in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2; and entered into illegal restrictive dealing agreements, in violation of Section 3 of the Clayton Act, 15 U.S.C. § 14. Specifically, Plaintiffs alleged that Eaton “used its dominant position to induce all heavy duty truck manufacturers to enter into de facto exclusive dealing contracts with Eaton,” and that such agreements foreclosed Plaintiffs from over 90% of the market for [¶] transmission sales. Plaintiffs sought treble damages, pursuant to Section 4 of the Clayton Act, 15 U.S.C. § 15, and injunctive relief, pursuant to Section 16 of the Clayton Act, 15 U.S.C. § 26.

On February 17, 2009, Plaintiffs’ expert, Dr. David DeRamus (“DeRamus”), submitted a report on both liability and damages. On May 11, 2009, Eaton filed a motion, pursuant to Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), to exclude DeRamus’s testimony. The District Court ruled that DeRamus would be allowed to testify regarding liability, but excluded DeRamus’s testimony on the issue of damages on the basis that his damages opinion failed the reliability requirements of Daubert and the Federal Rules of Evidence. ZF Meritor LLC v. Eaton Corp., 646 F.Supp.2d 663 (D.Del.2009). Plaintiffs filed- a motion for clarification, requesting that DeRamus be allowed to testify to alternate damages calculations -based on other data in his expert report, or in the alternative, seeking permission for DeRamus to amend his expert report to present his alternate damages calculations. The District Court decided to defer resolution of the damages issue and bifurcate the case.

The parties proceeded to trial on liability. On October 8, 2009, after a four-week trial, the jury returned a complete verdict for Plaintiffs, finding that Eaton had violated Sections 1 and 2 of the Sherman Act, and Section 3 of the Clayton Act. Following the verdict, Plaintiffs asked the District Court to set a damages trial, but no damages trial was set at that time. On October 30, 2009, Plaintiffs supplemented their earlier motion for clarification, incorporating additional arguments based on developments at trial.

On November 3, 2009, Eaton filed a renewed motion for judgment as a matter of law, or in the alternative, for a new trial. Eaton’s principal argument was that Plaintiffs failed to establish that Eaton engaged in anticompetitive conduct because Plaintiffs did not show, nor did they attempt to *268show, that Eaton priced its transmissions below its costs. Sixteen months later, on March 10, 2011, the District Court denied Eaton’s motion, reasoning that Eaton’s prices were not dispositive, and that there was sufficient evidence for a jury to conclude that Eaton’s conduct unlawfully foreclosed competition in a substantial portion of the [¶] transmissions market. ZF Mentor LLC v. Eaton Corp., 769 F.Supp.2d 684 (D.Del.2011).

On August 4, 2011, the District Court denied Plaintiffs’ motion for clarification, and denied Plaintiffs’ request to allow DeRamus to amend his expert report to include alternate damages calculations. The same day, the District Court entered an order awarding Plaintiffs $0 in damages. On August 19, 2011, the District Court entered an injunction prohibiting Eaton from “linking discounts and other benefits to market penetration targets,” but stayed the injunction pending appeal. Eaton filed a timely notice of appeal and Plaintiffs filed a timely cross-appeal.

II. JURISDICTION AND STANDARD OF REVIEW

The District Court had jurisdiction over this case pursuant to 28 U.S.C. §§ 1331 and 1337. We have appellate jurisdiction under 28 U.S.C. § 1291.

We exercise plenary review over an order denying a motion for judgment as a matter of law. LePage’s Inc. v. 3M, 324 F.3d 141, 145 (3d Cir.2003) (en banc). A motion for judgment as a matter of law should be granted “only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability.” Id. at 145-46 (quoting Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir.1993)). We review questions of law underlying a jury verdict under a plenary standard of review. Id. at 146 (citing Bloom v. Consol. Rail Corp., 41 F.3d 911, 913 (3d Cir.1994)). Underlying legal questions aside, “[a] jury verdict will not be overturned unless the record is critically deficient of that quantum of evidence from which a jury could have rationally reached its verdict.” Swineford v. Snyder Cnty., 15 F.3d 1258, 1265 (3d Cir.1994).

We review a district court’s decision to exclude expert testimony for abuse of discretion. Montgomery Cnty. v. Microvote Corp., 320 F.3d 440, 445 (3d Cir.2003). To the extent the district court’s decision involved an interpretation of the Federal Rules of Evidence, our review is plenary. Elcock v. Kmart Corp., 233 F.3d 734, 745 (3d Cir.2000). We also review a district court’s decisions regarding discovery and case management for abuse of discretion. United States v. Schiff, 602 F.3d 152, 176 (3d Cir.2010); In re Fine Paper Antitrust Litig., 685 F.2d 810, 817-18 (3d Cir.1982).

We review legal conclusions regarding standing de novo, and the underlying factual determinations for clear error. Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 399 F.3d 248, 253 (3d Cir.2005).

III. DISCUSSION

A. Effect of the Price-Cost Test

The most significant issue in this case is whether Plaintiffs’ allegations under Sections 1 and 2 of the Sherman Act and Section 3 of the Clayton Act are subject to the price-cost test or the “rule of reason” applicable to exclusive dealing claims. Under the rule of reason, an exclusive dealing arrangement will be unlawful only if its “probable effect” is to substantially lessen competition in the relevant market. Tampa Elec. Co. v. Nash*269ville Coal Co., 365 U.S. 320, 327-29, 81 S.Ct. 623, 5 L.Ed.2d 580 (1961); United States v. Dentsply Int'l, 399 F.3d 181, 191 (3d Cir.2005); Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98, 110 (3d Cir.1992). In contrast, under the price-cost test, to succeed on a challenge to the defendant’s pricing practices, a plaintiff must prove “that the [defendant’s] prices are below an appropriate measure of [the defendant’s] costs.” Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222, 113 S.Ct. 2578, 125 L.Ed.2d 168 (1993).9

Eaton urges us to apply the price-cost test, arguing that Plaintiffs failed to establish that Eaton engaged in anticompetitive conduct or that Plaintiffs suffered an antitrust injury because Plaintiffs did not prove — or even attempt to prove — that Eaton priced its transmissions below an appropriate measure of its costs. We decline to adopt Eaton’s unduly narrow characterization of this case as a “pricing practices” case, i.e., a case in which price is the clearly predominant mechanism of exclusion. Plaintiffs consistently argued that the LTAs, in their entirety, constituted de facto exclusive dealing contracts, which improperly foreclosed a substantial share of the market, and thereby harmed competition. Accordingly, as we will discuss below, we must evaluate the legality of Eaton’s conduct under the rule of reason to determine whether the “probable effect” of such conduct was to substantially lessen competition in the [¶] transmissions market in North America. Tampa Elec., 365 U.S. at 327-29, 81 S.Ct. 623. The price-cost test is not dispositive. •

*270 1. Law of Exclusive Dealing

An exclusive dealing arrangement is an agreement in which a buyer agrees to purchase certain goods or services only from a particular seller for a certain period of time. Herbert Hovenkamp, Antitrust Law ¶ 1800a, at 3 (3d ed. 2011). The primary antitrust concern with exclusive dealing arrangements is that they may be used by a monopolist to strengthen its position, which may ultimately harm competition. Dentsply, 399 F.3d at 191. Generally, a prerequisite to any exclusive dealing claim is an agreement to deal exclusively. Tampa Elec., 365 U.S. at 326-27, 81 S.Ct. 623; see Dentsply, 399 F.3d at 193-94; Barr Labs., 978 F.2d at 110 & n. 24.10 An express exclusivity requirement, however, is not necessary, LePage’s, 324 F.3d at 157, because we look past the terms of the contract to ascertain the relationship between the parties and the effect of the agreement “in the real world.” Dentsply, 399 F.3d at 191, 194. Thus, de facto exclusive dealing claims are cognizable under the antitrust laws. LePage’s, 324 F.3d at 157.

Exclusive dealing agreements are often entered into for entirely procompetitive reasons, and generally pose little threat to competition. Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 76 (3d Cir.2010) (“[I]t is widely recognized that in many circumstances, [exclusive dealing arrangements] may be highly efficient — to assure supply, price stability, outlets, investment, best efforts or the like — and pose no competitive threat at all.”) (quoting E. Food Servs. v. Pontifical Catholic Univ. Servs. Ass’n, 357 F.3d 1, 8 (1st Cir.2004)). For example, “[i]n the case of the buyer, they may assure supply, afford protection against rises in price, enable long-term planning on the basis of known costs, and obviate the expense and risk of storage in the quantity necessary for a commodity having a fluctuating demand.” Standard Oil Co. v. United States, 337 U.S. 293, 306, 69 S.Ct. 1051, 93 L.Ed. 1371 (1949). From the seller’s perspective, an exclusive dealing arrangement with customers may reduce expenses, provide protection against price fluctuations, and offer the possibility of a predictable market. Id. at 306-07, 69 S.Ct. 1051; see also Ryko Mfg. Co. v. Eden Servs., 823 F.2d 1215, 1234 n. 17 (8th Cir.1987) (explaining that exclusive dealing contracts can help prevent dealer free-riding on manufacturer-supplied investments to promote rival’s products). As such, competition to be an exclusive supplier may constitute “a vital form of rivalry,” which the antitrust laws should encourage. Race Tires, 614 F.3d at 83 (quoting Menasha Corp. v. News Am. Mktg. In-Store, Inc., 354 F.3d 661, 663 (7th Cir.2004)).

However, “[exclusive dealing can have adverse economic consequences by allowing one supplier of goods or services unreasonably to deprive other suppliers of a market for their goods[.]” Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 45, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984) (O’Connor, J., concurring), abrogated on other grounds by Ill. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28, 126 S.Ct. 1281, 164 L.Ed.2d 26 (2006); Barry Wright, 724 F.2d at 236 (explaining that “under certain circumstances[,] foreclosure might discourage sellers from entering, or seeking to sell in, a market at all, thereby reducing the amount of competition that *271would otherwise be available”). Exclusive dealing arrangements are of special concern when imposed by a monopolist. See Dentsply, 399 F.3d at 187 (“Behavior that otherwise might comply with antitrust law may be impermissibly exclusionary when practiced by a monopolist”). For example:

[S]uppose an established manufacturer has long held a dominant position but is starting to lose market share to an aggressive young rival. A set of strategically planned exclusive-dealing contracts may slow the rival’s expansion by requiring it to develop alternative outlets for its product, or rely at least temporarily on inferior or more expensive outlets. Consumer injury results from the delay that the dominant firm imposes on the smaller rival’s growth.

Phillip Areeda & Herbert Hovenkamp, Antitrust Law ¶ 1802c, at 64 (2d ed. 2002). In some cases, a dominant firm may be able to foreclose rival suppliers from a large enough portion of the market to deprive such rivals of the opportunity to achieve the minimum economies of scale necessary to compete. Id.; see LePage’s, 324 F.3d at 159.

Due to the potentially procompetitive benefits of exclusive dealing agreements, their legality is judged under the rule of reason. Tampa Elec., 365 U.S. at 327, 81 S.Ct. 623. The legality of an exclusive dealing arrangement depends on whether it will foreclose competition in such a substantial share of the relevant market so as to adversely affect competition. Id. at 328, 81 S.Ct. 623; Barr Labs., 978 F.2d at 110. In conducting this analysis, courts consider not only the percentage of the market foreclosed, but also take into account “the restrictiveness and the economic usefulness of the challenged practice in relation to the business factors extant in the market.” Barr Labs., 978 F.2d at 110-11 (quoting Am. Motor Inns, Inc. v. Holiday Inns, Inc., 521 F.2d 1230, 1251-52 n. 75 (3d Cir.1975)). As the Supreme Court has explained:

[I]t is necessary to weigh the probable effect of the contract on the relevant area of effective competition, taking into account the relative strength of the parties, the proportionate volume of commerce involved in relation to the total volume of commerce in the relevant market area, and the probable immediate and future effects which pre-emption of that share of the market might have on effective competition therein.

Tampa Elec., 365 U.S. at 329, 81 S.Ct. 623. In other words, an exclusive dealing arrangement is unlawful only if the “probable effect” of the arrangement is to substantially lessen competition, rather than merely disadvantage rivals. Id.; Dentsply, 399 F.3d at 191 (“The test [for determining anticompetitive effect] is not total foreclosure, but whether the challenged practices bar a substantial number of rivals or severely restrict the market’s ambit.”).

There is no set formula for evaluating the legality of an exclusive dealing agreement, but modern antitrust law generally requires a showing of significant market power by the defendant, Tampa Elec., 365 U.S. at 329, 81 S.Ct. 623; Race Tires, 614 F.3d at 74-75; LePage’s, 324 F.3d at 158, substantial foreclosure, Tampa Elec., 365 U.S. at 327-28, 81 S.Ct. 623; United States v. Microsoft Corp., 253 F.3d 34, 69 (D.C.Cir.2001), contracts of sufficient duration to prevent meaningful competition by rivals, CDC Techs., Inc. v. IDEXX Labs., Inc., 186 F.3d 74, 81 (2d Cir.1999); Omega Envtl., Inc. v. Gilbarco, Inc., 127 F.3d 1157, 1163 (9th Cir.1997), and an analysis of likely or actual anticompetitive effects considered in light of any procompetitive effects, Race Tires, 614 F.3d at 75; Dents-*272ply, 399 F.3d at 194; Barr Labs., 978 F.2d at 111. Courts will also consider whether there is evidence that the dominant firm engaged in coercive behavior, Race Tires, 614 F.3d at 77; SmithKline Corp. v. Eli Lilly & Co., 575 F.2d 1056, 1062 (3d Cir.1978), and the ability of customers to terminate the agreements, Dentsply, 399 F.3d at 193-94. The use of exclusive dealing by competitors of the defendant is also sometimes considered. Standard Oil, 337 U.S. at 309, 314, 69 S.Ct. 1051; NicSand, Inc. v. 3M Co., 507 F.3d 442, 454 (6th Cir.2007).

2. Brooke Group and the Price-Cost test

We turn now to some fundamental principles regarding predatory pricing claims and the price-cost test. “Predatory pricing may be defined as pricing below an appropriate measure of cost for the purpose of eliminating competitors in the short run and reducing competition in the long run.” Cargill, Inc. v. Monfort of Colo., 479 U.S. 104, 117, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 584 n. 8, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Advo, Inc. v. Phila. Newspapers, Inc.,