ZF Meritor, LLC v. Eaton Corp.

Eaton (defendant), the dominant maker of heavy-duty truck transmissions, signed long-term agreements with all four North American purchasers. The deals gave rebates for buying a high percentage of transmissions from Eaton, let Eaton terminate some agreements if a purchaser missed the threshold, required listing Eaton as the standard transmission (and, in some deals, removing competitors) in the purchasers' data books, and required preferential pricing for Eaton. ZF Meritor (plaintiff), a competitor with only about eight percent market share, sued for antitrust violations, alleging these were de facto exclusive-dealing arrangements. ZF's share fell further and it left the market. A jury found for ZF, the district court denied Eaton's motion for judgment as a matter of law, and Eaton appealed, arguing ZF failed to show below-cost pricing.

Whether the rule of reason, rather than the price-cost test, is the proper standard for an antitrust claim based on exclusive dealing where price is not the predominant mechanism of exclusion.