Opinion
No. 04-98-00873-CV
Delivered and Filed: March 13, 2002
Appeal from the 150th Judicial District Court, Bexar County, Texas, Trial Court No. 96-CI-08912, Honorable Janet Littlejohn, Judge Presiding.
Sitting: Phil HARDBERGER, Chief Justice, Alma L. LOPEZ, Justice, Sandee Bryan MARION, Justice.
AFFIRMED IN PART; REVERSED AND REMANDED IN PART
This case is on remand from the Texas Supreme Court. Long Distance International, Inc. and Star Marketing Service, Inc. (jointly referred to as "LDI/Star") appeal an order granting summary judgment in favor of Telefonos de Mexico, S.A. ("Telmex"), SBC International, Inc. and SBC Communications, Inc. (jointly referred to as "SBC"). In our original opinion, we affirmed the trial court's judgment, holding that the actions undertaken by LDI/Star were illegal under Mexican law, thereby precluding recovery under all of the asserted claims. See Long Distance Int' l, Inc. v. Telefonos De Mexico, S.A., 18 S.W.3d 706 (Tex.App.-San Antonio 2000), rev'd, 49 S.W.3d 347 (Tex. 2001). The Texas Supreme Court reversed our judgment, holding that LDI/Star's actions did not violate Mexican law and remanded the cause to this court to consider whether any other asserted ground supports the trial court's summary judgment order. See Long Distance Int'l, Inc. v. Telefonos De Mexico, S.A., 49 S.W.3d 347 (Tex. 2001).
LDI/Star asserts that the Texas Supreme Court's opinion only permits us to consider the grounds for summary judgment asserted in Telmex's motion for summary judgment. LDI/Star relies on the Texas Supreme Court's statement in its conclusion that it was remanding the cause to this court "to determine if any other grounds Telmex asserted in its summary-judgment motion supports the trial court's summary-judgment order." 49 S.W.3d at 356. However, in two other portions of its opinion, the Texas Supreme Court stated that it was remanding the cause to this court to determine "whether any other asserted ground supports the trial court's summary-judgment order." Id. at 349, 350. We do not believe that the reference to Telmex in the court's conclusion was intended to preclude our consideration of the grounds asserted in SBC's motion.
In LDI/Star's brief on remand, LDI/Star contends that the trial court erred in granting summary judgment in favor of Telmex and SBC on each of the following claims asserted by LDI/Star: (1) tortious interference with contract and tortious interference with prospective business relations; (2) the Texas Antitrust Act; (3) the Texas Deceptive Trade Practices Act ("DTPA"); and (4) breach of contract. We affirm the trial court's judgment as to LDI/Star's claim for breach of contract. We reverse the remainder of the trial court's judgment and remand the cause to the trial court for further proceedings consistent with this opinion.
Background
The factual and procedural background of the underlying lawsuit has been detailed both by this court and the Texas Supreme Court in our prior opinions. See Long Distance Int' l, Inc. v. Telefonos De Mexico, S.A., 18 S.W.3d at 709-711; Long Distance Int' l, Inc. v. Telefonos De Mexico, S.A., 49 S.W.3d at 349-51. Briefly, Telmex had an exclusive concession from the Mexican government to operate public telephone service in Mexico until January of 1997. SBC owned a ten percent interest in Telmex and assisted Telmex with its organization and development pursuant to a management agreement. Telmex entered into an agreement with MCI to provide International 1-800 service. Star entered into a contract with MCI to receive International 1-800 numbers, which Star provided to LDI. LDI entered into contracts with Mexican customers who would use the International 1-800 number to reach a switch in San Antonio, which would carry the customer's call to its termination point. Telmex believed that the business in which LDI/Star was engaged violated its exclusive concession and the laws of Mexico and the United States. Telmex disconnected LDI/Star's International 1-800 numbers. LDI/Star sued Telmex and SBC for numerous claims, and the trial court granted summary judgment in favor of Telmex and SBC as to all claims.
Standard of Review
The motions for summary judgment filed by Telmex and SBC requested summary judgment under both traditional and no evidence standards.
Under traditional summary judgment standards, a party moving for summary judgment has the burden of establishing as a matter of law that no genuine issue of material fact exists as to one or more essential elements of the plaintiff's cause of action. Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989); Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). If the defendant meets this burden, the plaintiff must then raise a genuine issue of material fact on that element. Gonzalez v. City of Harlingen, 814 S.W.2d 109, 112 (Tex.App.-Corpus Christi 1991, writ denied). In reviewing a summary judgment, an appellate court accepts as true all evidence supporting the non-movant. Nixon, 690 S.W.2d at 549. All inferences are indulged in favor of the non-movant, and all doubts are resolved in his favor. Id.
We apply the same legal sufficiency standard in reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict. Moore v. K-Mart Corp., 981 S.W.2d 266, 269 (Tex.App.-San Antonio 1998, pet. denied). We look at the evidence in the light most favorable to the respondent against whom the summary judgment was rendered, disregarding all contrary evidence and inferences. Moore, 981 S.W.2d at 269. A no-evidence summary judgment is improperly granted if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Id. Less than a scintilla of evidence exists when the evidence is "so weak as to do no more than create a mere surmise or suspicion" of a fact. Id. More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Id.
Damages
With regard to several of the causes of action asserted by LDI/Star, Telmex and SBC contend that LDI/Star has sustained no legally recognizable damages.
Loss of profits damages need only be proven with reasonable certainty, and the rule regarding such proof is intended to be flexible so as to accommodate the various circumstances in which claims for lost profits arise. Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex. 1994); America' s Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 629 (Tex.App.-San Antonio 1996, writ denied). What constitutes reasonably certain evidence of lost profits is a fact intensive determination. Szczepanik, 883 S.W.2d at 649; Samaras, 929 S.W.2d at 629. At a minimum, opinions or estimates of lost profits must be based on objective facts, figures, or data from which the amount of lost profits may be ascertained. Szczepanik, 883 S.W.2d at 649.
Where estimates are based on objective facts or data and there are firm reasons to expect a business to yield a profit, recovery is not prohibited simply because the enterprise is new. Samaras, 929 S.W.2d at 629. It is the activity that is the enterprise, and if the activity is well-established, the fact that a newly formed entity is engaging in the activity will not preclude recovery. Samaras, 929 S.W.2d at 629.
LDI/Star's expert testified in his deposition that LDI incurred substantial damages. Evidence also was introduced to show that LDI had operated profitably during two months. With regard to the enterprise, the Fifth Circuit has noted that "the U.S. export market for reorigination services was a definite and sizable export market" with revenues of one competitor reaching $3 million/year. Access Telecom, Inc. v. MCI Telecommunications Corp., 197 F.3d 694, 712 (5th Cir. 1999). Therefore, since the expert relied on objective facts and data and the enterprise was well-established, some evidence was presented that LDI sustained damage.
Telmex and SBC separately challenge the existence of any damage to Star. However, Star held the contract with MCI. That contract was used by LDI in its business operations and formed the basis for its ability to provide its services. In essence, LDI and Star were operating as a single business enterprise. Although that concept has historically been used as a method of imposing liability on two entities operating as a single business enterprise, under the facts presented in this case, the joint operation of LDI/Star is sufficient to preclude summary judgment as to Star on the issue of damages. Paramount Petroleum Corp. v. Taylor Rental Ctr., 712 S.W.2d 534, 536 (Tex.App.-Houston [14th Dist.] 1986, writ ref'd n.r.e.) (defining single business enterprise as occurring when corporations are not operated as separate entities but rather integrate their resources to achieve a common business purpose).
Our holding will not entitle LDI/Star to a double recovery of the same damages. Our holding simply recognizes that the operation of LDI/Star as a single business enterprise entitles LDI and Star to jointly recover any damages awarded by the jury.
Tortious Interference
The elements of tortious interference with contract are: (1) the existence of a contract subject to interference; (2) a willful and intentional act of interference; (3) the act was a proximate cause of the plaintiff's damages; and (4) actual damages or loss. Powell Industries, Inc. v. Allen, 985 S.W.2d 455, 456 (Tex. 1998); Milam v. National Ins. Crime Bureau, 989 S.W.2d 126, 131 (Tex.App.-San Antonio 1999, no pet. h.). In order to recover for tortious interference with a prospective business relationship, the plaintiff must show a wrongful interference with the plaintiff's prospective agreement. Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 727 (Tex. 2001).
With regard to LDI/Star's tortious interference claims, Telmex and SBC assert that summary judgment was properly granted because (1) LDI/Star's operation is illegal under United States law; (2) Telmex and SBC were justified or privileged in their actions; and (3) Telmex and SBC share a unity of interest precluding a finding of a conspiracy.
• Legality of Contract
A contract that is illegal or a contract to do a thing that cannot be performed without violating a law cannot be interfered with. Juliette Fowler Homes, Inc. v. Welch Associates, Inc., 793 S.W.2d 660, 664-65 (Tex. 1990); Ralston Purina Co. v. McKendrick, 850 S.W.2d 629, 638-39 (Tex.App.-San Antonio 1993, writ denied). Although the Texas Supreme Court held that LDI/Star's contracts were legal under Mexican law, Telmex and SBC also contend that the contracts were illegal under United States law because LDI/Star had not obtained a certificate as required by section 214 of the Federal Communications Act. Telmex and SBC further contend that LDI/Star's operation was in violation of MCI's tariff. Although LDI/Star contends that this ground was not presented to the trial court, SBC's motion states that LDI/Star's contracts are illegal "under both Mexican and U.S. laws and tariffs."
• Section 214
Section 214 of the Federal Communications Act prohibits a carrier from constructing a line, extending a line, acquiring or operating a line or extension of a line, or engaging in transmission over or by means of an additional or extended line without a certificate from the Federal Communications Commission ("FCC") that present or future public convenience and necessity require or will require the construction, or operation, or construction and operation, of such an additional or extended line. 47 U.S.C. § 214. Section 214 concludes, "Provided, however, that nothing in this section shall be construed to require a certificate or other authorization from the Commission for any installation, replacement, or other changes in plant, operation, or equipment, other than new construction, which will not impair the adequacy or quality of service provided." Id.
The FCC has adopted policies stating that resale is a common carrier activity, and a user wishing to resell international private lines for the provision of a basic telecommunications service must first obtain certification as an international common carrier under Section 214 of the Communications Act. In re Regulatory Policies Concerning Resale and Shared Use of Common Carrier Services and Facilities, 60 F.C.C.2d 261, ¶ 24 (1976); see also In re VIA USA, Ltd. Telegroup, Inc., 9 F.C.C.R. 2288, n. 19 (1994) see also In re Regulation of International Accounting Rates , Phase II, Report and Order, 7 F.C.C.R. 559, ¶ 119 (1991).
The federal courts, however, do not read section 214 as broadly as the FCC. In United Telegraph Workers, AFL-CIO v. Federal Communications Comm' n, 436 F.2d 920, 924-25 (D.C. Cir. 1970), the court rejected a contention that a certificate was required for the type of service to be provided, noting, "While the physical construction of new facilities or of extensions may not be a sine qua non to applying the provision, the certification requirement of § 214(a) does seem to require some more substantial change in existing services than is present here. . . . This limited and temporary combination of existing facilities does not rise to the magnitude of a new line or channel of communications requiring certification." Following that reasoning, the same court later stated, "Section 214 would appear to have a limited office with respect to regulation of service offerings on existing lines." MCI Telecommunications Corp. v. Federal Communications Comm' n, 561 F.2d 365, 375 (D.C. Cir. 1977).
The phrase "sine qua non" means an indispensable requisite or condition. Black's Law Dictionary 1242 (5th ed. 1979).
In a case factually similar to the instant case, a company (ATI) engaged in providing services similar to the services provided by LDI/Star. Access Telecom, Inc. v. MCI Telecommunications Corp., 197 F.3d at 709. ATI sued Telmex, SBC, and MCI after being disconnected by Telmex. Id. In addressing the legality of the arrangement under United States law, the Fifth Circuit held that ATI's contracts and services were not illegal under U.S. law because "Section 214 applies only to the construction of facilities and does not prevent carriers from offering new services." Id.
We agree with the Fifth Circuit and hold that LDI/Star's services were not illegal under section 214.
• Tariff
MCI's tariff was incorporated by reference into the agreement between MCI and Star. The tariff provided:
MCI 800 International Call Coverage may not be acquired and used for resale in foreign jurisdictions where MCI's PTT partners either have blocked or interrupted MCI 800 or have threatened to do so, because of the resale activities being conducted within that country by MCI customers.
Telmex and SBC contend that since Telmex, who was a PTT partner, threatened to block or interrupt MCI 800 service, LDI/Star violated the tariff by using MCI 800 for resale. Telmex and SBC rely on federal case law stating that a tariff has the force of law. See, e.g., Marcus v. AT T Corp., 138 F.3d 46, 56 (2nd Cir. 1998); MCI Telecomm. Corp. v. Garden State Inv. Corp., 981 F.2d 385, 387 (8th Cir. 1992); Carter v. American Tel. Tel. Co., 365 F.2d 486, 496 (5th Cir. 1966). Therefore, Telmex and SBC reason that when Telmex threatened to block MCI 800, LDI/Star were legally prohibited from using MCI 800 service for resale. We disagree.
The statement that a tariff has the force of law must be viewed in the context of the facts of the cases in which that language appears. Viewing the statement in context, a tariff is given the force of law as between the carrier and its customers, particularly with regard to the rates established by the tariff and the collection of those rates. See, e.g., Marcus v. AT T Corp., 138 F.3d at 56 (stating legal relationship between carrier and its customers is defined by tariffs which is given force of law); MCI Telecomm. Corp. v. Garden State Inv. Corp., 981 F.2d at 387 (giving force of law to carrier's claim for non-payment of rates). The case cited by SBC to support this proposition does broadly state a tariff is not a mere contract, it is the law. Carter v. American Tel. Tel. Co., 365 F.2d at 496. However, the cases cited by Carter as authority put that statement in proper context. See Compania Anonima Venezolana De Navegacion v. A. J. Perez Export Co., 303 F.2d 692, 696 n. 12 (5th Cir. 1962) ("Collection and payment of the charge for transportation is not a mere matter of contract. For a rate once regularly published is no longer merely the rate imposed by the carrier, but becomes the rate imposed by law."); United States v. Associated Air Transp., Inc., 275 F.2d 827, 833 (5th Cir. 1960) ("Such tariffs, at least those which are factors in determining the carrier's charges, have the force and effect of statutes."). Therefore, a tariff only has the force of law as between the carrier and its customers, and the force of law given a tariff cannot be relied on by Telmex and SBC to support their contention that LDI/Star's services were illegal. As one federal court has noted, the protections afforded by a tariff are created to protect customers, not competitors; "competitors are not the intended beneficiary of [rules regarding] public utility regulation." City of Kirkwood v. Union Elec. Co., 671 F.2d 1173, 1178-79 (8th Cir. 1982). In addition, if the FCC were given the opportunity to interpret the tariff and determine whether LDI/Star's use of MCI 800 International Call Coverage was in violation of the tariff, it is difficult to believe that the FCC would find LDI/Star's use illegal, particularly in view of the FCC's policy favoring international resale and its refusal to permit U.S. carriers and their overseas correspondents from applying resale prohibitions imposed by overseas carriers. See In re Regulation of International Accounting Rates, Phase II, Report and Order, 7 F.C.C.R. 559, ¶ 2 n. 1, 8, 27 (1991). We therefore hold that LDI/Star's services were not illegal based on MCI's tariff.
• Privilege/Justification
Even if a plaintiff establishes the elements of tortious interference, a defendant may still prevail upon establishing the affirmative defense of justification. Texas Beef Cattle Co. v. Green, 921 S.W.2d 203, 210 (Tex. 1996). The justification defense is based on either the exercise of (1) one's own legal rights; or (2) a good faith claim to a colorable legal right, even though the claim ultimately proves to be mistaken. Id. at 211. The motivation behind the assertion of a legal right to interfere with a contract is irrelevant. Id. Improper motives cannot transform lawful actions into actionable torts. Id.
Because LDI/Star's services were not in violation of Mexican law, Long Distance Int'l, Inc., 49 S.W.3d at 355, Telmex was not exercising a legal right when it disconnected LDI/Star's International 1-800 service, and the evidence is conflicting with regard to whether Telmex and SBC were exercising a colorable legal right under Mexican law. A colorable right is one that would lead others to suppose, without inquiry, the existence of the right claimed. Bennett v. Computer Assocs. Int' l, Inc., 932 S.W.2d 197, 202 (Tex.App.-Amarillo 1996, writ denied). LDI/Star's expert, Elvia Salas De De Stefano, an attorney and former assistant to the director general of the SCT's legal affairs, testified that the SCT letter regarding the illegality of "call-back" was extra-legal and did not have the status of regulation, law, or legal interpretation. Salas explained that the letter was not "founded and motivated" or supported by specific references to facts, applicable laws, and conclusions. In addition, the SCT letter only precluded call-back service. The Texas Supreme Court previously explained the difference between the services provided by LDI/Star and call-back service. See Long Distance Int' l, Inc. v. Telefonos De Mexico, S.A., 49 S.W.3d at 354-55. Finally, evidence was introduced showing that SBC informed Telmex of its concerns with regard to whether Telmex had a legal right to disconnect. Therefore, the record contains sufficient evidence to preclude a finding that Telmex and SBC were exercising a colorable legal right as a matter of law.
In addition, the evidence is conflicting with regard to the "good faith" element. Telmex and SBC refused to provide MCI with the legal basis for its disconnect decision in response to MCI's request. There also was testimony that Telmex agreed to provide MCI with advance notice prior to disconnecting, presumably to allow MCI to demonstrate that the customer's lines to be disconnected were not being used in an illegal manner. However, Telmex failed to provide any advance notice.
Finally, the Fifth Circuit has rejected SBC's ability to claim Telmex's privilege, even if such a privilege existed because there was not a unity of interest between Telmex and SBC. See Access Telecom, Inc., 197 F.3d at 710. The Texas Supreme Court has held that an agent will not be privileged in its actions if the agent is motivated by personal interest. Holloway v. Skinner, 898 S.W.2d 793, 797 (Tex. 1995). The Fifth Circuit noted "SBC is only a 10% owner of Telmex and there is evidence which a factfinder could find that SBC's actions in helping Telmex . . . were as much for SBC's benefit as its own entity rather than as an agent of Telmex, given that SBC intended to independently enter [the customer's] market." Id. We agree with the Fifth Circuit and find an absence of a unity of interest between Telmex and SBC; therefore, SBC would be unable to rely on Telmex's privilege even if a jury finds that such a privilege existed.
• Conspiracy
An actionable civil conspiracy requires a combination by two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means. See Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). Telmex and SBC assert that SBC held a 10% equity interest in Telmex and provided services under a management agreement, giving the entities a unity of interest.
However, "[u]nity of purpose or a common design is, of course, characteristic of any conspiracy and cannot be seriously considered as indicating the lack of a combination." Metropolitan Life Ins. Co. v. La Mansion Hotels Resorts, Ltd., 762 S.W.2d 646, 652 (Tex.App.-San Antonio 1988, writ dism'd). Even in cases involving a corporation which owns a 100% equity interest in another corporation, this court has refused to find such a unity of interest as to preclude a finding of conspiracy. Valores Corporativos, S.A. de C.V. v. McLane Co., 945 S.W.2d 160, 168 (Tex.App.-San Antonio 1997, writ denied). This court has relied on two principles to support such refusal: (1) a corporation is a legal entity separate and distinct from any other legal entity; and (2) while one entity's interests may well be coterminous with those of another entity, circumstances may arise in which the first entity pursues its own interests to the detriment of those of the corporation. Id.
In view of this court's refusal to find a unity of interest in a situation involving 100% equity ownership, summary judgment would be improper based on a 10% ownership interest. Furthermore, LDI/Star introduced evidence to show that SBC's actions in assisting with the disconnects could have been motivated by SBC's desire to enter the "resale" market in pursuit of its own interests. Therefore, the evidence does not establish as a matter of law that Telmex and SBC share such a unity of interest as to preclude a finding of conspiracy. See Access Telecom, Inc., 197 F.3d at 710 (refusing to find unity of interest).
Texas Antitrust Act
The parties appear to address five arguments regarding LDI/Star's Texas Antitrust Act claims: (1) the inapplicability of the Texas act; (2) the absence of a conspiracy; (3) the absence of antitrust injury; (4) Telmex's monopoly right; and (5) LDI/Star's indirect purchaser status.
• Application of Texas Antitrust Act/Relevant Market
The purpose of the Texas Free Enterprise and Antitrust Act (the "Texas Antitrust Act") is "to maintain and promote economic competition in trade and commerce occurring wholly or partly within the State of Texas and to provide the benefits of that competition to consumers in the state." Tex. Bus. Com. Code Ann. § 15.04 (Vernon 1987). The Texas Antitrust Act is designed to protect competition and not individual competitors." Caller-Times Pub. Co. v. Triad Communications, Inc., 826 S.W.2d 576, 581 (Tex. 1992). The provisions of the Texas Antitrust Act "shall be construed in harmony with federal judicial interpretations of comparable federal antitrust statutes." Tex. Bus. Com. Code Ann. § 15.04 (Vernon 1987).
In this case, the effect of Telmex's actions was to preclude an alternative source of phone service to Mexican consumers; thus, the only consumers affected were Mexican residents. Tomas Revesz testified that he did not even solicit business from consumers within Texas. Therefore, Telmex and SBC maintain that the Texas Antitrust Act is inapplicable.
In Access Telecom, Inc., the Fifth Circuit held that the dismissal of the antitrust claims in that case was impermissible under the export trade exception which applies the antitrust laws to commerce with foreign nations upon a showing that the conduct had a significant effect on export trade. Access Telecom, Inc., 197 F.3d at 712. As the Fifth Circuit noted, "It is clear that the U.S. export market for reorigination services was a definite and sizeable export market, and the failure of these 80 businesses is clearly an effect on export trade from the United States."
Telmex and SBC contend that reliance on Access Telecom would be misplaced because the Texas Antitrust Act does not have an "export trade" exception similar to the federal statutes. Therefore, there is no "comparable" provision in the Texas Antitrust Act that would permit reliance on federal law.
Ignoring the export trade exception, the application of the Texas Antitrust Act appears to hinge on whether a component of the transaction implicates intrastate commerce. Pounds Photographic Labs, Inc. v. Noritsu America Corp., 818 F.2d 1219, 1224 (5th Cir. 1987). For purposes of applying the Texas Antitrust Act, Texas courts divide transactions into subparts dealing, respectively, with interstate commerce and with intrastate commerce. Id. Even where the overall transaction primarily affects interstate commerce, the Texas Antitrust Act applies if a component of the transaction implicates intrastate commerce. Id.
In this case, we adopt the reasoning of the Fifth Circuit and find a fact issue was raised as to whether the relevant U.S. market is the export market from Texas. 197 F.3d at 712. Carol Ansley, an SBC employee, admitted that most of the resellers were based in Texas and that Telmex knew that the resellers were Texas-based. In view of the defined market, the transaction affects Texas commerce, and the Texas Antitrust Act is implicated.
• Conspiracy
As a matter of law, the acts of an agent and its principal are the acts of a single entity and cannot constitute conspiracy. Holloway v. Skinner, 898 S.W.2d at 795. SBC asserts that it was an agent of Telmex; therefore, Telmex and SBC were operating as a single entity. In discussing the justification defense as it related to the tortious interference allegations by ATI, the Fifth Circuit rejected this "unity of interest" argument. Access Telecom, Inc., 197 F.3d at 710. The Fifth Circuit noted "SBC is only a 10% owner of Telmex and there is evidence which a factfinder could find that SBC's actions in helping Telmex . . . were as much for SBC's benefit as its own entity rather than as an agent of Telmex, given that SBC intended to independently enter [the customer's] market." Id. We follow the Fifth Circuit and find that the evidence does not establish the existence of a unity of interest as a matter of law.
• Antitrust Injury
The Texas Antitrust Act permits any person whose business or property is injured to bring a lawsuit to recover damages. Tex. Bus. Com. Code Ann. § 15.21(a) (Vernon 1987). Telmex and SBC assert that LDI/Star do not have "antitrust standing to prosecute an economic injury to [LDI/Star] unless that injury corresponds to an injury of the same type to the relevant market." Scott v. Galusha, 890 S.W.2d 945, 950 (Tex.App.-Fort Worth 1994, writ denied). Applying this standard, however, LDI/Star's injury corresponds to an injury of the same type to the relevant market. See Access Telecom, Inc., 197 F.3d at 712 (noting Telmex's actions resulted in the failure of 80 businesses in the relevant market).
• Telmex's Monopoly Right
Telmex and SBC contend that there can be no antitrust liability because Telmex had a lawful monopoly in Mexico. However, LDI/Star presented summary judgment evidence that Telmex's monopoly did not give it the right to terminate the service to LDI/Star. Furthermore, LDI/Star contends that Telmex's monopoly does not preclude its antitrust claim in view of the essential facilities doctrine. Under that doctrine, liability can be established by showing: (1) control of the essential facility by a monopolist; (2) a competitor's inability practically or reasonably to duplicate the essential facility; (3) the denial of the use of the facility to a competitor; and (4) the feasibility of providing the facility. MCI Communications Corp. v. American Tel. Tel. Co., 708 F.2d 1081, 1132-33 (7th Cir. 1983). Evidence was presented on each of these elements by LDI/Star. Telmex and SBC contend that the essential facilities doctrine does not apply because Telmex was not a competitor in the Texas market; however, that argument ignores the relevant market and the reason Telmex was opposed to resellers. Under its monopoly, Telmex would control and establish the rate for both legs of the call, including the leg of the call from the Texas switch to its destination. LDI/Star's services undercut Telmex for the second leg of the call. Therefore, Telmex was competing with LDI/Star for the revenue from the second leg of the call.
The nature of the relevant market makes the facts in Almeda Mall, Inc. v. Houston Lighting Power Co., 615 F.2d 343 (5th Cir. 1980), distinguishable. In Almeda Mall, the Fifth Circuit held that the activity sought by the appellants was more akin to "substitution" than to competition. Id. at 353. In this case, however, the activity engaged in by LDI/Star resulted in competition in the market for the exportation of U.S. phone services. The competitive effect of that market on Telmex's business is the very reason Telmex disconnected LDI/Star's International 1-800 service.
• Indirect Purchaser Status
Telmex and SBC contend that LDI/Star lacks standing to assert the antitrust claim because it is an indirect purchaser. However, the "indirect purchaser" rule appears to be limited in application to cases involving a monopolist's use of its power to overcharge its purchasers. The common concept in indirect purchaser cases is that an indirect purchaser bears some portion of a monopoly overcharge by virtue of an antecedent transaction between the monopolist and another, independent purchaser. Campos v. Ticketmaster Corp., 140 F.3d 1166, 1169-70 (8th Cir. 1998). The theory behind the rule is that only the direct purchaser who participated in the antecedent transaction should bring suit to recover due, in part: (1) to the uncertainties in calculating damages to the indirect purchaser without a complex attempt to determine the proper apportionment of the pass-on overcharge; and (2) to avoid multiple and possible duplicate recoveries if both direct and indirect purchasers were able to bring suit. Abbott Laboratories, Inc. v. Segura, 907 S.W.2d 503, 506-07 (Tex. 1995). Therefore, the "indirect purchaser" rule would appear to be limited to those cases dealing with a monopoly overcharge, unlike this case where the alleged antitrust violations caused LDI/Star to go out of business, not simply required LDI/Star to pay an increased price.
Deceptive Trade Practices Act
LDI/Star contends that Telmex engaged in an unconscionable action by engaging in an act that took advantage of the lack of knowledge, ability, experience or capacity of a consumer to a grossly unfair degree. Telmex raises two arguments in its brief regarding the unavailability of a DTPA claim: (1) absence of contact between Telmex and LDI/Star; and (2) absence of consumer status. However, the only grounds raised in the motions for summary judgment regarding the DTPA claim were (1) that the actions in which Telmex engaged were not unconscionable; and (2) the DTPA does not extend to actions taken in Mexico. Telmex never raised any issue regarding LDI/Star's consumer status in its motion, and Telmex does not argue on appeal that summary judgment was properly granted because the conduct occurred in Mexico. Therefore, the only issue presented with regard to the DTPA claim is whether Telmex could have engaged in unconscionable conduct absent any direct contact with LDI/Star.
The elements of a DTPA "unconscionable" cause of action are (1) the plaintiff is a consumer, (2) the defendant engaged in an unconscionable action or course of action, (3) that constituted a producing cause of the consumer's damages. Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794, 803 (Tex.App.-Amarillo 1995, writ denied). An "unconscionable action or course of action" is "an act or practice which, to a consumer's detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree" or "results in a gross disparity between the value received and consideration paid, in a transaction involving transfer of consideration." Tex. Bus. Com. Code Ann. § 17.45(5) (Vernon Supp. 2001).
Privity between the plaintiff and defendant is not a consideration in deciding the plaintiff's standing to sue under the DTPA. Flenniken v. Longview Bank Trust Co., 661 S.W.2d 705, 707 (Tex. 1983). A plaintiff establishes his standing to sue in terms of his relationship to a transaction, not by a contractual relationship with the defendant. Id. The only requirement is that the goods or services sought or acquired by the consumer form the basis of his complaint. Id. Furthermore, there is no requirement that the defendant's unconscionable act occur simultaneously with the sale or lease of the goods or services that form the basis of the consumer's complaint. Id. Accordingly, no direct contact between LDI/Star and the defendants is required, and summary judgment was improperly granted based on Telmex's argument regarding the lack of contact between Telmex and LDI/Star.
Breach of Contract
LDI/Star asserts that it was a third party beneficiary to a consent decree entered by a federal judge requiring that Telmex not discriminate among United States international service providers as a condition to SBC's acquisition of an equity interest in Telmex. As a third party beneficiary, LDI/Star claims it has standing to sue Telmex and SBC for breach of the consent decree.
Telmex's motion for summary judgment contended LDI/Star was not a third-party beneficiary as a matter of law. SBC's motion for summary judgment asserted that there was no evidence: (1) of any contract to which LDI/Star was a third-party beneficiary; (2) of any breach; and (3) of standing by LDI/Star to enforce the consent decree.
The only argument addressed by LDI/Star in its brief is that "Telmex and SBC have produced no evidence or authority for the proposition that LDI/Star was not an intended third-party beneficiary of the consent decree." LDI/Star cites no authority for its contention that it is a third party beneficiary to the consent decree; therefore, LDI/Star fails to provide adequate briefing to consider the breach of contract claim and its complaint as to that claim is waived. See Tex.R.App.P. 38.1(h).
Assuming error had been preserved, the fact that a person might receive an incidental benefit from a contract to which he is not a party does not give that person a right of action to enforce the contract. MCI Telecomm. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 651 (Tex. 1999). A third party may recover on a contract made between other parties only if the parties intended to secure some benefit to that third party, and only if the contracting parties entered into the contract directly and primarily for the benefit of the third party. Id. The intention to contract or confer a direct benefit to a third party must be clearly and fully spelled out or enforcement by the third party must be denied. Id. Consequently, a presumption exists that the parties contracted for themselves unless it "clearly appears" that they intended a third party to benefit from the contract. Id. Nothing in the language of the consent decree indicates an intent that LDI/Star benefit from its provisions. Furthermore, the actions of Telmex did not violate the consent decree because Telmex did not discriminate among the carriers, i.e., the evidence established that Telmex terminated all resellers regardless of which carrier contracted with the reseller.
Conclusion
The summary judgment as to LDI/Star's breach of contract claim is affirmed. The remainder of the summary judgment is reversed, and the cause is remanded to the trial court for further proceedings consistent with this opinion.