## Facts

- Eastern Dental Corporation (EDC) distributed orthodontic products and resold certain disposable orthodontic items supplied by Isaac Masel Co., Inc. (Masel), a manufacturer and distributor selling both to distributors (wholesale) and directly to practitioners (retail).
- The parties operated for years without a formal written supply agreement, using invoices and statements to document transactions.
- On August 10, 1978, Masel notified EDC it would no longer supply products to EDC.
- EDC sued alleging (1) monopolization and attempted monopolization under Sherman Act § 2, focusing on a purported wholesale market for “facebows,” (2) breach of a requirements contract, and (3) breach of the warranty of merchantability based on allegedly defective goods, including claimed loss of goodwill.
- Masel moved for partial summary judgment on the antitrust claims, the contract claim, and EDC’s ability to recover loss-of-goodwill damages.

## Issues

1. Whether Masel’s refusal to supply EDC could constitute monopolization or attempted monopolization under Sherman Act § 2, and whether a distinct wholesale facebow product market and monopoly power in that market could be shown.
2. Whether the alleged requirements contract was enforceable under UCC § 2-201 where no writing stated or otherwise evidenced a quantity term tied to EDC’s requirements.
3. Whether EDC could recover consequential damages for loss of goodwill on its warranty and contract theories under Pennsylvania law.

## Decision

- Summary judgment was denied on the Sherman Act § 2 monopolization and attempted-monopolization claims limited to a purported wholesale facebow market, due to genuine disputes over market definition and Masel’s power within that submarket.
- Summary judgment was granted for Masel on Sherman Act § 2 theories directed to other product markets, where Masel’s undisputed market share was less than 1% and therefore insufficient as a matter of law to show a dangerous probability of monopolization.
- Summary judgment was granted for Masel on EDC’s breach-of-contract claim because the alleged requirements contract failed the UCC statute of frauds for lack of a writing indicating the quantity term (i.e., the buyer’s requirements).
- Summary judgment was granted for Masel as to EDC’s claim for loss-of-goodwill damages under the breach-of-warranty theory.

## Legal Principles

- Sherman Act § 2 attempted monopolization requires proof supporting a dangerous probability of achieving monopoly power; an extremely small market share may be insufficient as a matter of law.
- Market definition and monopoly power are fact-intensive; summary judgment is inappropriate where evidence could support a narrowly defined relevant product market and dominance within it.
- Under UCC § 2-201, a requirements contract for the sale of goods must be evidenced by a writing that indicates the quantity term; in a requirements setting, the writing must show that quantity is tied to the buyer’s requirements sufficiently to permit enforcement.
- Under Pennsylvania law, consequential damages for loss of goodwill are not recoverable on the warranty theory in the circumstances presented.

## Conclusion

The court permitted EDC to proceed only on a narrowed § 2 theory focused on a possible wholesale facebow submarket and on non-goodwill aspects of its warranty claim, while rejecting the alleged unwritten requirements contract under the UCC statute of frauds and barring recovery of goodwill damages on the warranty theory.


E. Dental Corp. v. Isaac Masel Co., 502 F. Supp. 1354 (E.D. Pa. 1980)