In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

Nos. 04-1098 & 04-1202
REPUBLIC TOBACCO CO.,
                         Plaintiff-Appellee/Cross-Appellant,
                              v.

NORTH ATLANTIC TRADING COMPANY, INC., et al.,
                    Defendants-Appellants/Cross-Appellees.

                         ____________
       Appeals from the United States District Court for the
          Northern District of Illinois, Eastern Division.
            No. 98 C 4011—John F. Grady, Judge.
                         ____________
   ARGUED JUNE 17, 2004—DECIDED SEPTEMBER 1, 2004
                    ____________



  Before FLAUM, Chief Judge, and MANION and WILLIAMS,
Circuit Judges.
  FLAUM, Chief Judge. This appeal involves the claims that
two competing tobacco companies brought against one
another—one company suing for violation of antitrust laws,
the other for defamation. North Atlantic Trading Co., Inc.
(“North Atlantic”) was upset when its efforts to engage new
markets for its cigarette papers proved unsuccessful. It
blamed its difficulties in cultivating new customers on the
business practices of its competitor, Republic Tobacco
Company (“Republic”) and decided to sue. The hard feelings
2                                   Nos. 04-1098 & 04-1202

went both ways—Republic became upset with North Atlantic
after North Atlantic criticized Republic’s business practices
in two letters sent to customers. Claiming that it had been
defamed (among other things), Republic also decided to sue.
  The parties’ dueling lawsuits were eventually consolidated
into one case before the United States District Court for the
Northern District of Illinois. At summary judgment, the
district court considered both parties’ multiple claims and
counterclaims—the only one to survive being Republic’s
defamation claim. Not only did it advance; it was successful
at summary judgment. Following this judgment, a jury trial
was held on the issue of damages, both presumed and
punitive, for the defamation claim. The jury returned a ver-
dict for $8.4 million in presumed damages and $10.2 million
in punitive damages. The trial court granted North Atlan-
tic’s subsequent motion for remittitur, reducing the awards
to $3.36 million and $4.08 million, respectively.
   On appeal, North Atlantic seeks review of: (1) the district
court’s decision to grant summary judgment to Republic on
its defamation claim; (2) the remitted damage awards; and
(3) the district court’s decision to grant summary judgment to
Republic on North Atlantic’s antitrust claims. Republic
cross-appeals the district court’s refusal to entertain a pro-
cedure that might have enabled Republic to appeal the remit-
titur. For the reasons stated in this opinion, we affirm the
district court’s decisions with respect to Republic’s defama-
tion claim, North Atlantic’s antitrust claims, and Republic’s
cross-appeal. On the issue of damages, we vacate the dis-
trict court’s award of presumed and punitive damages, and
award to Republic $1 million in presumed damages and $2
million in punitive damages.
Nos. 04-1098 & 04-1202                                     3

                     I. Background
  Republic and North Atlantic are competitors in the mar-
ket for premium roll-your-own (“RYO”) cigarette papers,
tobacco, and other tobacco-related products. Republic and
North Atlantic sell their RYO products to distributors and
wholesalers, who in turn resell the products to outlets such
as convenience stores, drugstores, gas stations, and mini-
marts. Republic’s products are marketed under several
brand names, including Job, Top, and Drum, while North
Atlantic’s products are marketed under the brand name Zig-
Zag. North Atlantic’s Zig-Zag has been the number-one
selling domestic RYO cigarette paper brand since its intro-
duction in the U.S. in 1938. North Atlantic estimates its
domestic market share of cigarette paper is 49 percent or
higher. Republic is the second largest supplier of cigarette
paper, with a market share of approximately 25 percent.
Robert Burton Associates (“RBA”) is the third major com-
petitor in the cigarette paper business.
   In 1997, North Atlantic acquired an exclusive license to
market and distribute the Zig-Zag brand of RYO papers in
the United States. At this time, North Atlantic announced
that it sought to challenge Republic’s historic market dom-
inance in the “Southeastern” United States—a group of nine
states where Republic’s total market share is as much as 95
to 98 percent. Things did not go according to North Atlan-
tic’s plan and the company experienced some difficulty in
penetrating this market. Republic asserts that North
Atlantic’s disappointing sales growth in these states was the
product of simple market economics, principally Republic’s
lower pricing and superior marketing strategy.
  In contrast, North Atlantic claims that its sales difficul-
ties were caused, in part, by Republic’s unfair and unlawful
business practices. North Atlantic believed Republic to be
violating antitrust and unfair competition laws by pursuing
4                                      Nos. 04-1098 & 04-1202

enhanced exclusivity agreements through its incentive
programs for distributors and retailers. North Atlantic also
claims that it believed Republic was violating trademark
and unfair competition laws by defacing Zig-Zag display
boxes.1


A. Disputed Statements
  Naturally, in the course of business relations, North Atlantic
and Republic sent letters to their customers. Statements
contained in two letters sent from North Atlantic represen-
tatives to North Atlantic customers or potential customers
that were critical of Republic’s business practices form the
basis of Republic’s defamation suit. The first letter (the
“Czerewko Letter”) was sent to a potential customer in the
course of North Atlantic and Republic’s battle for retail out-
lets. The second letter (the “August 13 Letter”) was sent to
North Atlantic customers shortly after North Atlantic filed
its lawsuit against Republic.


    1. Czerewko Letter
  In January 1998, North Atlantic Regional Manager John
Czerewko sent a letter to a customer attacking the integrity
of Republic’s business conduct and accusing Republic of
engaging in inappropriate activity with respect to the


1
  Plastic display boxes were used to package RYO papers sold by
North Atlantic in limited promotional runs. Customers received
the display boxes along with their purchase of the products inside.
Some of Republic’s customers wanted to use the boxes to display and
sell Republic’s cigarette papers. To meet this demand, Republic
obtained unused boxes from third-party distributors and then re-
labeled the boxes with its own labels, restocked the boxes with its
products, and made them available to customers upon request.
Nos. 04-1098 & 04-1202                                       5

plastic display boxes. In late 1997, Clark Oil, one of the
largest convenience store chains in the Midwest, elected to
stock and sell Republic’s products exclusively. Czerewko
was involved in a North Atlantic campaign to convince
Clark to drop its exclusivity with Republic. North Atlantic
offered $95,000 in promotional money to Clark if it agreed
to sell North Atlantic products, however this offer was less
lucrative than the $110,000 offer Clark received from
Republic.
  In the course of courting this potential client, Czerewko
wrote a one-page letter to Clark buyer Sanjiv Jain discuss-
ing Republic’s competing proposal for exclusivity as well as
the modifications to the display boxes. Czerewko wrote,
“Frankly, I have some concerns not only with the Exclusivity
proposal, the rationale, the Cigarette Paper category, but also
for Clark in long term consequences.” Below this sentence,
are two boldface headings (“The Republic Proposal for
exclusivity” and “Similarity of Display Units”), each with
a series of bullet-points underneath. According to Republic
and the district court, the defamatory statements in the
Czerewko Letter consist of the following three sentences
located under the “Similarity of Display Units” heading:
    • Recently, another Chain was positioned for exclusivity
      and a modified, defaced Zig Zag unit was used. We own
      the patent-trademark which has been violated.
    • Our Attorneys initiated legal action regarding this
      and had to include the Chain in the Trademark-
      Patent violation.
  Republic contends that these statements were false and
defamatory because North Atlantic held no patent or trade-
mark rights in the boxes and had not initiated litigation
against anyone in connection with the display boxes.
6                                    Nos. 04-1098 & 04-1202

  After receiving the Czerewko Letter, Clark forwarded it
to Clark’s supplier, Eby-Brown, which buys products directly
from Republic and distributes them to retailers. Thereafter,
Eby-Brown discontinued its participation in Republic’s in-
centive programs. Clark subsequently discontinued its par-
ticipation in Republic’s incentive program as well.


    2. August 13 Letter
  In June 1998, Republic filed this defamation action, a few
days after Clark cancelled its exclusive contract. Two weeks
later, North Atlantic filed a second suit in the U.S. District
Court for the Western District of Kentucky, alleging unfair
competition, deceptive trade practices, and antitrust
violations. On August 13, 1998, North Atlantic sent a letter
to all of its customers—many of whom were also customers
of Republic—explaining that North Atlantic had filed a
lawsuit against Republic, charging Republic with “unfair
competition, deceptive trade practices and antitrust viola-
tions.” The letter went on to describe the substance of these
allegations as follows:
     The complaint alleges that Republic Tobacco’s exclusiv-
     ity agreements, rebates, incentive programs, buybacks
     and other activities violate federal and state antitrust
     and unfair competition laws. The complaint charges
     that Republic Tobacco entered into contracts, combina-
     tions, and conspiracies in illegal restraint of trade and
     has attempted to illegally monopolize, and has illegally
     monopolized, the roll-your-own (“RYO”) cigarette paper
     market in the southeast United States.
       The complaint also alleges that Republic Tobacco has
     defaced and directed others to deface North Atlantic’s
     and National Tobacco’s vendor displays for ZIG-ZAG®
     RYO cigarette papers. On many of these vendors, the
     ZIG-ZAG® brand name has been covered up with an ad-
     vertisement for JOB®, TOP®, and other Republic Tobacco
Nos. 04-1098 & 04-1202                                          7

    RYO cigarette brands. The lawsuit alleges that these
    activities violate North Atlantic’s and National Tobacco’s
    rights and constitute unfair competition under federal
    and state law.
  Republic responded to the August 13 Letter with a letter
of its own, calling North Atlantic’s claims “frivolous,” and
asserting that they “were raised solely for the purpose of
fulfilling [North Atlantic’s] published business plan to in-
crease revenue of the Zig Zag products primarily through
price increases.” (internal quotations omitted).


B. Incentive Programs
  North Atlantic’s antitrust claims, as described in the August
13 Letter, are premised on Republic’s alleged attempts to
foreclose competition in the nine-state “Southeast” region
through its incentive programs. The nine-state region, as
defined by North Atlantic’s economist, includes the states
east of the Mississippi River and south of the Ohio River:
Alabama, Florida, Georgia, Kentucky, Mississippi, North
Carolina, South Carolina, Tennessee, and Virginia (collec-
tively the “Southeast”). Historically, Republic’s brands have
been tremendously popular in each of these nine states.
  Republic’s incentive programs allowed participating cus-
tomers to receive rebates, free products, and free travel in
exchange for stocking or promoting specified amounts of
Republic’s RYO products and meeting certain sales goals.2


2
  The Republic Value-Added Rebate Incentive Program (“VRIP”)
provides incentives to distributors for stocking, promoting, and
selling Republic’s products to their retail accounts. Republic’s
Convenience Store Distribution Incentive Program (“CDIP”)
provides discounts to convenience stores to stock, promote, and
sell Republic’s products. The Republic Travel Plus Program, open
                                                    (continued...)
8                                      Nos. 04-1098 & 04-1202

Program participants could enhance rebate and travel ben-
efits by electing to sell Republic’s brands of cigarette paper
exclusively. These programs lasted for one year or less and
were all terminable at will.
   North Atlantic contends that Republics’ incentive pro-
grams had the result of foreclosing North Atlantic products
from the shelves of 46 percent of convenience stores in the
Southeast, effectively eliminating choice in the region. Repub-
lic counters that its practices are not anticompetitive and its
success in these states is due to its procompetitive incen-
tive-based marketing strategy and its offering low, steady
prices on its products at a time when North Atlantic raised
its prices by more than 15 percent.


C. Proceedings Below
  Once served with the complaint in this case, North
Atlantic sought to transfer this case to Kentucky, or to stay
proceedings pending resolution of its Kentucky lawsuit, but
the district court refused. North Atlantic then filed counter-
claims against Republic in the court below, including the
same antitrust claim presented in the Kentucky action.
Accordingly, the case proceeded below, and the Kentucky
court suspended the action.
   Following extensive fact and expert discovery, the parties
filed cross-motions for summary judgment. In its summary
judgment order, the district court considered Republic’s six-
count Seconded Amended Complaint and North Atlantic’s ten-
count amended counterclaim. The district court granted
Republic’s motions with respect to all of North Atlantic’s



2
  (...continued)
to both distributors and convenience stores, offers “points” to be
used toward trips, such as cruises.
Nos. 04-1098 & 04-1202                                        9

claims. With respect to the antitrust counterclaims, the
court held that a determination of the relevant market was
a necessary element of each count brought by North Atlantic.
Although the court acknowledged that the definition of a
relevant market is a question of fact and that the parties
disagreed on the relevant geographic market, the court
found that there was no evidence to support a definition of
the nine-state Southeast as the relevant geographic market.
The district court found that there was no doubt that Republic
and North Atlantic operated in a nationwide market and
that their purchasers, i.e., distributors and wholesalers, turn
to suppliers across the nation for RYO papers. As North
Atlantic did not argue that Republic monopolized, attempted
to monopolize, unreasonably restrained trade in, or fore-
closed competition in the national market for RYO papers,
the district court granted summary judgment on each of
North Atlantic’s antitrust counterclaims.
  In the same order, the district court granted Republic’s
motion for summary judgment on its defamation claim, hold-
ing that North Atlantic was liable for defamation per se as
a matter of law in light of (1) the statements in the Czerewko
Letter that “[w]e own the patent-trademark which has been
violated,” and “[o]ur Attorneys initiated legal action regarding
this and had to include the Chain in Trademark-Patent
violation,” and (2) the statements in the August 13 Letter
describing North Atlantic’s Kentucky lawsuit allegations.
According to the court, these statements were false asser-
tions about Republic, were unprivileged, and were defama-
tory per se because they attacked the integrity of Republic’s
business conduct, prejudiced Republic in its business, and
with respect to the August 13 Letter, accused Republic of il-
legal conduct.
  Following the court’s order, a jury trial was held to assess
presumed and punitive damages on Republic’s defamation
claim. At trial, Republic introduced evidence to show that
10                                  Nos. 04-1098 & 04-1202

its reputation had been harmed by North Atlantic’s state-
ments. Three witnesses testified that after the August 13
Letter was sent, Republic received phone calls from its sales-
men and from dozens of customers indicating that custom-
ers thought less of Republic, were concerned that they had
been “dragged [ ] into illegal conduct,” and were wary of
further participation in Republic’s incentive programs.
Republic’s President, Donald Levin, testified that reputation
is important in the small, closely regulated tobacco industry
and that Republic had built strong business relationships and
a good reputation over the years. Absent from Republic’s
presentation was evidence that any customer reduced pur-
chases or severed business relations with Republic as a
direct result of North Atlantic’s actions.
  After a three-day trial, the jury returned a verdict in
Republic’s favor of $8.4 million in presumed damages and
$10.2 million in punitive damages. Upon North Atlantic’s
motion, the district court remitted these awards by 60 per-
cent, to $3.36 million and $4.08 million, respectively. The
court then gave Republic the option of accepting the remitti-
turs or facing a new trial. Republic accepted the remittiturs.
We now consider both parties’ appeals.


                       II. Analysis
A. Defamation
  We review de novo the district court’s decision to grant
summary judgment in Republic’s favor, construing all the
facts and inferences in favor of North Atlantic. See Vision
Fin. Group, Inc. v. Midwest Family Mut. Ins. Co., 

, 642 (7th Cir. 2004).
  A defamatory statement is one that “tends to cause such
harm to the reputation of another that it lowers that person
in the eyes of the community or deters third persons from
associating with him.” Kolegas v. Heftel Broad. Corp., 607
Nos. 04-1098 & 04-1202                                     

, 206 (Ill. 1992) (citing Restatement (Second) of
Torts § 599 (1977)). To make out a defamation claim under
Illinois law, the plaintiff must show “that the defendant[ ]
made a false statement concerning him, that there was an
unprivileged publication to a third party with fault by the
defendant, which caused damage to the plaintiff.” Krasinski
v. United Parcel Serv., Inc., 

, 471 (Ill. 1988)
(citing Restatement (Second) of Torts § 588 (1977)).
   Defamatory statements may be actionable per se or ac-
tionable per quod. Illinois courts have recognized four cate-
gories of statements that are considered defamatory per se:
(1) words that impute the commission of a crime; (2) words
that impute infection with a loathsome disease; (3) words
that impute an inability to perform or a want of integrity in
the discharge of duties of office or employment; or (4) words
that prejudice a party, or impute lack of ability, in his or
her trade, profession, or business. See 

. If a statement qualifies as defamatory per se (the
theory upon which Republic solely relies), it is unnecessary
for a plaintiff to demonstrate actual damage to reputation.
Rather, statements that fall within these per se categories
are thought to be so obviously and materially harmful to
the plaintiff that injury to its reputation may be presumed.
See Owen v. Carr, 

, 1147 (Ill. 1986). In
contrast, with a per quod action, in order to recover the
plaintiff must plead and prove that it sustained actual
damage of a pecuniary nature (“special damages”). See
Dubinsky v. United Airlines, 

, 447 (Ill. App.
Ct. 1999). For further discussion of per quod actions see
Bryson v. News America Publications, 

, 1221
(Ill. 1996).
  Under the Illinois innocent construction rule, even a state-
ment that falls into one of the limited per se categories will
not be found defamatory per se if it is “reasonably capable
of an innocent construction.” 

.
12                                       Nos. 04-1098 & 04-1202

This rule “requires courts to consider a written or oral
statement in context, giving the words, and their implica-
tions, their natural and obvious meaning.” 

. If a statement may reasonably be interpreted inno-
cently, it cannot be actionable per se. See 

Illinois courts have firmly emphasized that “[o]nly reasonable
innocent constructions will remove an allegedly defamatory
statement from the per se category.” 

original). Whether a statement is reasonably capable of an
innocent construction is a question of law for the court to
decide. See 

.
   A number of common law privileges and defenses exist
that may shield a defendant from liability for making an
otherwise defamatory statement. Four of these defenses and
privileges, to varying degrees, are relevant to this appeal.
First, a statement that does not contain any verifiable facts
(as some call, “an opinion”) is not actionable under Illinois
law.3 In Illinois, “[a] statement of fact is not shielded from
an action for defamation by being prefaced with the words
‘in my opinion,’ but if it is plain that the speaker is ex-
pressing a subjective view, an interpretation, a theory, con-
jecture, or surmise, rather than claiming to be in possession
of objectively verifiable facts, the statement is not action-
able.” Haynes v. Alfred A. Knopf, Inc., 

, 1227 (7th
Cir. 1993); see also Wilkow v. Forbes, Inc., 

, 555


3
   This principle overlaps with the constitutional protection for
statements of on matters of public concern that are not provably
false. See Milkovich v. Lorain Journal Co., 

(1990).
Milkovich, a federal constitutional law case, reflects the fact that
the First Amendment imposes limits on state defamation law.
However, we must first examine the threshold question of whether
the challenged statements are actionable under Illinois law; if they
are not, the First Amendment does not come into play. See Wilkow
v. Forbes, Inc., 

, 555 (7th Cir. 2001); Stevens v. Tillman,

, 400 (7th Cir. 1988).
Nos. 04-1098 & 04-1202                                     13

(7th Cir. 2001) (Illinois law); Pope v. Chronicle Publ’g Co.,

, 614 (7th Cir. 1996) (Illinois law); Restatement
(Second) of Torts § 566 (1977) (“A defamatory communica-
tion may consist of a statement in the form of an opinion,
but a statement of this nature is actionable only if it implies
the allegation of undisclosed defamatory facts as the basis
for the opinion.”). Second, substantial truth is a complete
defense to an allegation of defamation. See 

. This rule derives from the “recognition that falsehoods
which do no incremental damage to the plaintiff’s reputation
do not injure the only interest the law of defamation pro-
tects.” 

(emphasis in original). Third,
under Illinois law, publication of defamatory matters in a
report of an official proceeding that deals with a matter of
public concern is privileged as long as the report is accurate
and complete. See Restatement (Second) of Torts § 611
(1977); see also Catalano v. Pechous, 

, 360 (Ill.
1980). Fourth, Illinois law confers a privilege upon “[s]tate-
ments made within a legitimate business context.” Larson
v. Decatur Mem’l Hosp., 

, 867 (Ill. App. Ct.
1992). Under this rule, “[a] statement is conditionally privi-
leged when the defendant makes it (1) in good faith; (2) with
an interest or duty to be upheld; (3) limited in scope to that
purpose; (4) on a proper occasion; and (5) published in a
proper manner only to proper parties.” 

v. Hayes Freight Lines, Inc., 

, 221 (Ill.
1968)).
  Federal constitutional law adds another layer of limita-
tions on the kind of defamatory statements for which a
defendant may be found liable. At common law, defamation
was a strict liability tort, but constitutional doctrine has
imposed culpability, or fault, requirements in most cases.
See New York Times v. Sullivan, 

(1964); Gertz v.
Robert Welch, Inc., 

(1974). The level of culpa-
bility is determined by whether the statement was of public
concern and whether the plaintiff is a public or private fig-
14                                    Nos. 04-1098 & 04-1202

ure. Moreover, overlapping with the common law rule, the
First Amendment protects statements on matters of public
concern that are not provably false. See Milkovich, 

, 20 (1990). For further discussion of various First Amend-
ment limitations to defamation actions see Ronald D.
Rotunda & John E. Nowak, Treatise on Constitutional Law:
Substance and Procedure §§ 20.33-20.35 (2d. ed. 1992).
   As important to this appeal as the principles of defamation
is the rule of waiver. “We have long refused to consider argu-
ments that were not presented to the district court in re-
sponse to summary judgment motions.” Arendt v. Vetta Sports,
Inc., 

, 237 (7th Cir. 1996) (quoting Cooper v.
Lane, 

, 371 (7th Cir. 1992)); see also Maust v.
Headley, 

, 650 (7th Cir. 1992); DeValk Lincoln
Mercury v. Ford Motor Co., 

, 338 (7th Cir. 1987).
Appellate review is not designed to serve as an unsuccessful
party’s second bite at the apple—an opportunity to raise is-
sues and arguments that were not brought forth below. This
is so even when the issue is an element of a plaintiff’s prima
facie case. See Resolution Trust Corp. v. Juergens, 

, 153 (7th Cir. 1992) (the law of summary judgment “does
not permit a nonmovant defendant to delay pointing out
claimed flaws in the plaintiff’s prima facie case until an ap-
peal is underway”). As we said of waiver in Boyers v. Texaco
Refining and Marketing, Inc.:
     It is axiomatic that issues and arguments which were
     not raised before the district court cannot be raised for
     the first time on appeal . . . . The rule is essential in
     order that parties may have the opportunity to offer all
     the evidence they believe relevant to the issues . . . [and]
     in order that litigants may not be surprised on appeal
     by final decision there of issues upon which they have
     had no opportunity to introduce evidence. To reverse
     the district court on grounds not presented to it would
     undermine the essential function of the district court.
Nos. 04-1098 & 04-1202                                      15

    This rule is not meant to be harsh, overly formalistic, or
    to punish careless litigators. Rather, the requirement that
    parties may raise on appeal only issues which have
    been presented to the district court maintains the effi-
    ciency, fairness, and integrity of the judicial system for
    all parties.

, 812 (7th Cir. 1988) (citations and quotations
omitted).
 With these principles in mind, we now turn to the state-
ments at issue in this case.


  1. Czerewko Letter
  To review, the disputed statements in the Czerewko Letter
consist of the following three sentences:
    • Recently, another Chain was positioned for exclusivity
      and a modified, defaced Zig Zag unit was used. We own
      the patent-trademark which has been violated.
    • Our Attorneys initiated legal action regarding this
      and had to include the Chain in the Trademark-
      Patent violation.
  Republic asserts that the Czerewko Letter was designed
to persuade Clark to abandon its exclusive deal with Republic,
in favor of a less profitable deal from North Atlantic. Republic
contends that to accomplish this task North Atlantic util-
ized a strategy of attacking Republic’s lower prices, rebates
and travel incentives with slander and threats.
  North Atlantic responds that the Czerewko Letter was
sent by a regional sales director to a single customer to pro-
pose a business relationship and express “concerns” about
a competitor’s proposal. North Atlantic contends that the
letter’s statements cannot reasonably be construed as ob-
jectively false and defamatory. Although North Atlantic did
16                                   Nos. 04-1098 & 04-1202

not have patent rights in the display boxes, the company
did believe that it had rights in those boxes (and indeed, it
pursued a trademark claim below, albeit unsucessfully). Ac-
cording to North Atlantic, the Czerewko Letter simply ex-
pressed an opinion that the company’s legal rights had been
violated.
  We disagree with North Atlantic’s characterization of the
Czerewko Letter and with its contention that the letter’s
organization as a list of “concerns” prevents the disputed
statements from being actionable as defamation. As explained
above, prefacing a defamatory statement with the phrase
“in my opinion” does not shield a defendant from liability,
and the same is true for presenting a defamatory statement
under a list of “concerns.” Prefatory language does not control
whether these statements are actionable as defamation;
what matters is whether the assertions included in the
three disputed sentences are verifiably false.
  We conclude that they are. These statements cannot be
read as the expression of “a subjective view, an interpreta-
tion, a theory, conjecture, or surmise . . . .” 

. Nor are they mere sales puffery as can be found
elsewhere in the letter (e.g., “Zig Zag is a magical name”).
Rather, Czerewko is claiming to be in possession of objec-
tively verifiable facts that could easily be evaluated in a
defamation suit. Did North Atlantic have trademark rights or
hold a patent in the display boxes? Was this patent or trade-
mark violated? Had legal action been pursed to enforce these
rights? Had another chain been included in the legal action?
A jury could readily answer all of these questions and
thereby verify the truthfulness of Czerewko’s statements.
What is more, the phrasing of these statements in the past
tense makes them all the easier to separate out from
statements expressing the speaker’s subjective view. The
reasonable reader would understand Czerewko to be
informing him of events that have already occurred. While
Nos. 04-1098 & 04-1202                                      17

it may be difficult in some circumstances to verify or refute
a prediction about the future, it is relatively easy to do so
when describing events that have allegedly occurred in the
past.
  In this case, however, it is unnecessary for a jury to exam-
ine the truth of Czerewko’s statements as North Atlantic does
not dispute that the underlying facts are false. That is,
North Atlantic concedes that it had no trademark and held
no patent on the display boxes; and it follows that there was
no patent or trademark violation. Moreover, North Atlantic
admits that at the time that the Czerewko Letter was
written it had filed no lawsuit, so clearly then no other
“chain” had been included in a lawsuit.
   Still, North Atlantic urges us to give an innocent construc-
tion to the disputed statements. North Atlantic argues that
we should interpret the sentence mentioning “legal action”
as either true (because the word “action” could mean “activ-
ity” and not just a lawsuit) or nondefamatory (because
simply saying that someone has been sued is not defama-
tory in this litigious day and age). To benefit from the
innocent construction rule, a statement must be reasonably
susceptible to an innocent interpretation. “When a defama-
tory meaning was clearly intended and conveyed, [Illinois
courts] will not strain to interpret allegedly defamatory
words in their mildest and most inoffensive sense in order
to hold them nonlibelous under the innocent construction
rule.” 

. If we interpret the words
according to the meaning that they were intended to convey
to the reasonable reader, it is clear that they are both false
and defamatory. First, the words “legal action” can only be
intended to mean some sort of lawsuit or official proceeding
and not mere discussion between parties (which is the
interpretation required to render the statement true). It
stretches reason to interpret “legal action” as “any activity
of a lawyer” when it is used in daily parlance to mean a
18                                   Nos. 04-1098 & 04-1202

lawsuit or legal proceeding. Second, we are unpersuaded by
North Atlantic’s argument that litigation is a fact of life and
that a statement that a corporation has been sued is not, of
itself, defamatory. Even if that were true, the statement
was not simply that Republic had been sued, but it provided
factual detail about Republic’s alleged inappropriate
activity. We also must bear in mind that the Czerewko
Letter was sent to a Republic customer in order to convince
the customer to establish an exclusive relationship with
North Atlantic.
   North Atlantic further argues that the district court erred
by granting Republic summary judgment on its defamation
claim without requiring Republic to prove that it was
injured by the statements in the Czerewko Letter. However,
it was unnecessary for Republic to plead and prove special
damages as the allegations in the Czerewko Letter fit into
at least two per se categories—malfeasance or misfeasance
in the performance of an office or a job and unfitness for
one’s profession or trade. That is, the Czerewko Letter
suggests that Republic was involved in improperly defacing
its competitor’s merchandise and conducting its business in
violation of trademark and patent laws. North Atlantic
again contends that it is entitled to an innocent construc-
tion for these statements. However, as we noted in Haynes,
“Illinois courts (and federal courts when interpreting
Illinois law) have been quick to find implications of criminal
conduct or of employee or business misconduct in state-
ments that might have seemed susceptible of an interpreta-
tion that would have taken them out of the per se catego-

. Again, considering the letter’s context
and the words’ natural and obvious meaning, we conclude
that an innocent construction of the Czerewko Letter would
be inappropriate.
  Finally, with respect to the Czerewko Letter, North Atlantic
raises the following three issues that were not presented to
Nos. 04-1098 & 04-1202                                    19

the district court at summary judgment: (1) the Czerewko
Letter did not contain any defamatory statements “of and
concerning” Republic; (2) the district court made no inquiry
into fault; and (3) the Czerewko Letter is privileged as a
statement made within a legitimate business context.
Despite North Atlantic’s vigorous efforts to convince us that
these issues command reversal of the district court’s
judgment, we are unable to consider the arguments related
to any of them because North Atlantic waived them by not
raising them prior to appeal.


  2. August 13 Letter
  Turning to the August 13 Letter, North Atlantic’s main
contention is that the description of its antitrust claims is
not a statement of fact concerning Republic; rather, it is a
statement of opinion regarding the legality of Republic’s
practices. According to North Atlantic, every lawsuit ex-
presses the plaintiff’s opinion that the defendant’s conduct
has violated the law. An expression of that opinion, North
Atlantic contends, is not actionable as a false and defama-
tory factual statement, regardless of how a court ultimately
resolves the plaintiff’s claims on the merits. North Atlantic
warns of dire consequences if the district court’s ruling is
upheld—suggesting that unsuccessful plaintiffs will become
per se liable for defamation for having alleged incorrectly
that the defendant violated the law and that judicial
proceeding will have to be conducted in secret.
  Republic responds that North Atlantic waived this argu-
ment by failing to raise it below. North Atlantic counters
that it “consistently argued that the August 13 letter did
not contain a false statement of fact, and hence was not
actionable, because it accurately summarized the allega-
tions of the Kentucky lawsuit.” Looking to record, we see
that North Atlantic did argue below that the August 13
20                                      Nos. 04-1098 & 04-1202

Letter did not raise a false statement of fact. However, it did
so by making an argument based on truth. See Memorandum
of Law in Support of Defendant’s Motion for Summary
Judgment at 17-18 (“The statements allegedly attributable
to . . . the August 13 letter accurately summarize the claims
set forth in North Atlantic’s legal pleadings. Accordingly,
the statements are true and non-actionable.”). North
Atlantic is therefore attempting on appeal to recast its
truth defense as an opinion defense. But under Illinois law
truth and opinion are two separate defenses. See 

-14 (listing “substantial truth” and “statement
of opinion” as two separate defenses). We, therefore, agree
with Republic that North Atlantic waived the opinion defense
by failing to raise it below. In any event, North Atlantic’s
position seems akin to a rule that filing a lawsuit provides
blanket protection for one seeking to publicize false facts.
This is a proposition that we, of course, find unsettling.
Moreover, we are unimpressed by North Atlantic’s in
terrorem argument that finding liability here will have the
effect of muzzling litigants, as North Atlantic’s argument
fails to take into account common law and constitutional
defenses that protect parties speaking on matters of
common interest or public concern.
  Next, North Atlantic contends that the August 13 Letter
is protected by common law privilege as a description of an
official proceeding. In Illinois, this privilege protects publi-
cations that fairly and accurately report an official action or
proceeding. See Catalano v. Pechous, 

, 360-
61 (Ill. 1980). The district court held this privilege inappli-
cable to the August 13 Letter for two reasons: (1) North
Atlantic made the underlying allegations in the Kentucky
lawsuit, and could not “confer the privilege upon itself”, and
(2) the basis of this privilege is the public’s interest in official
proceedings, and North Atlantic disseminated the information
to its own customers, not the public. In response to the first
Nos. 04-1098 & 04-1202                                      21

reason, North Atlantic argues that as long as the underly-
ing lawsuit itself is not objectively baseless (designed solely
to immunize otherwise defamatory statements), there is no
reason in law or logic to strip the plaintiff of the privilege.
This is an argument for the modification or extension of
Illinois law, and as a federal court sitting in diversity, we
are obligated to apply Illinois law as announced by the
Illinois Supreme Court. In circumstances where a state
supreme court has not issued a ruling on the issue pre-
sented, “the rulings of the intermediate court control,
unless there is a persuasive indication that the highest
court would decide the issue differently.” Allstate Ins. Co. v.
Keca, 

, 800 (7th Cir. 2004).
  While the Illinois Supreme Court has not directly addressed
whether this privilege may be “self-conferred”—i.e., by filing
a pleading and then reporting on it, we are confident that if
presented with the issue, the Illinois Supreme Court would
determine that the privilege may not be self-conferred. It is
significant in our view that the Illinois Supreme Court has
adopted the official proceeding privilege as expressed in the
Second Restatement § 611. See 

-
61 (abandoning § 611 of the Restatement (First) of Torts and
adopting § 611 of the Restatement (Second) of Torts). The
commentary to the Second Restatement of Torts states:
    A person cannot confer this privilege upon himself by
    making the original defamatory publication himself and
    then reporting to other people what he had stated. This is
    true whether the original publication was privileged or
    not.
Restatement (Second) of Torts, § 611, comment c (1977).
  Given that the Illinois Supreme Court has adopted § 611,
we think it likely that they would follow this commentary
as well. Moreover, our conclusion is bolstered by a ruling
from an Illinois appellate court holding that this privilege
22                                      Nos. 04-1098 & 04-1202

may not be self-conferred. See Kurczaba v. Pollock, 

, 443 (Ill. App. Ct. 2000) (finding the fair report
privilege not available to defendant who circulated his own
complaint to third parties).
   We are unpersuaded by North Atlantic’s arguments that
the Illinois Supreme Court would decide the issue differ-
ently. North Atlantic relies primarily on ADT Co. v. Brink’s
Inc., 

(7th Cir. 1967), a case in which this Court
(applying Illinois law) held that a defamation defendant
was entitled to invoke the privilege with respect to state-
ment made in a press release describing a lawsuit against
its competitor. Putting aside any factual differences between
that case and the one before us now, Brink’s was based on
the First Restatement, which did not have language anal-
ogous to comment c of the Second Restatement.4
  Next, we address North Atlantic’s contention that the dis-
trict court erred in failing to require Republic to prove fault.
Under Gertz v. Robert Welch, Inc., 

(1974),
North Atlantic argues that Republic was obligated to show
at least negligence, and to the extent that this case involves
a matter of public concern, Republic was required to show
actual malice. Republic responds that North Atlantic
waived this argument by not raising it before the district
court. We agree that by failing to point out this alleged
deficiency in Republic’s case prior to appeal North Atlantic
waived this argument.
  Finally, North Atlantic contends that the district court
erred by granting summary judgment to Republic without
requiring Republic to prove that it was injured by the
August 13 Letter. As with the Czerewko Letter, the state-


4
   The rule against self-conferral renders this privilege inapplica-
ble to the August 13 Letter, and it is therefore unnecessary for us
to address the alternate ground upon which the district court sup-
plied for its decision.
Nos. 04-1098 & 04-1202                                        23

ments of the August 13 Letter fit comfortably within several
per se categories. North Atlantic accuses Republic of defacing
property and operating its business in violation of federal
and state law. North Atlantic argues that under the inno-
cent construction rule, the August 13 Letter can reasonably
be construed as describing North Atlantic’s good-faith
allegations about the legality of Republic’s conduct. North
Atlantic’s position is beside the point, though, because regard-
less of North Atlantic’s professed intentions, the letter sub-
stantively conveys objectively verifiable facts which can
only be read one way. North Atlantic’s position seeks to
turn the innocent construction rule into a subjective test.
The test is objective: it asks whether there is an objectively
reasonable innocent interpretation of the allegedly defama-
tory statements. In this case, we conclude that there is not.


B. Damages
  With respect to the damage awards, North Atlantic argues
that the district court erred in the following three ways: (1)
by allowing the jury to award presumed damages and punitive
damages absent a predicate determination of actual malice;
(2) by refusing to consider whether $3.36 million in pre-
sumed damages is impermissibly “substantial,” and by
allowing Republic to recover that amount; and (3) by permit-
ting Republic to recover punitive damages at all, much less
an award of $4.08 million. We address each argument in
turn.
   First, we review de novo North Atlantic’s contention that
the district court committed legal error by allowing Republic
to recover damages without making a predicate determina-
tion of fault. North Atlantic contends that Illinois law requires
a plaintiff to prove actual malice, i.e., knowledge of falsity
or reckless disregard for truth or falsity, to recover either pre-
sumed or punitive damages. North Atlantic’s position has
merit. Indeed, the Illinois Supreme Court has never approved
24                                   Nos. 04-1098 & 04-1202

the recovery of punitive or presumed damages on less than
actual malice. See, e.g., Babb v. Minder, 

, 758
(7th Cir. 1986) (“Under Illinois law, . . . only upon a showing
of actual malice may damages be presumed and punitive
damages be awarded.”); Troman v. Wood, 

,
296 (Ill. 1975) (“Only if liability was predicated on actual
malice could punitive damages be awarded or actual damages
be presumed.”). And while the United States Supreme Court
has held that the federal Constitution does not prohibit a
private individual from recovering punitive or presumed
damages upon a showing of less than actual malice when
the statements in question do not involve a matter of public
concern, see Dun & Bradstreet, Inc. v. Greenmoss Builders,
Inc., 

, 773-74 (1985), the Illinois Supreme Court
has yet to decide, as a matter of state law, whether this
lower threshold of recovery will be permitted.
  However, none of this aids North Atlantic. First of all,
North Atlantic waived this argument by failing to propose
a jury instruction requiring a predicate finding of actual
malice for general damages or to object to the court’s in-
struction on that ground. See Fed. R. Civ. P. 51; Gordon v.
Degelman, 

, 298 (7th Cir. 1994). Furthermore,
while there was no actual malice instruction given for pre-
sumed damages, the court instructed the jury that it could
award punitive damages only if it found that North Atlantic
“knew [its] statements were untrue” or “made the statements
with conscious disregard as to whether they were true or
not.” This standard is at least as strict as the actual malice
standard of knowledge or reckless disregard. Following this
instruction, the jury awarded punitive damages to Republic.
Thus, the jury necessarily found that North Atlantic acted
with “knowledge or conscious disregard” of the statements’
falsity and, a fortiori, that the actual malice standard had
been met.
  Second, we consider North Atlantic’s argument that the
district court abused its discretion by allowing Republic to
Nos. 04-1098 & 04-1202                                     25

recover $3.36 million in presumed damages. Because this is
a case of defamation per se, proof of actual damage was un-
necessary and Republic was entitled to presumed damages.
After a trial on damages, the jury awarded Republic $8.4
million is presumed damages, which the district court later
reduced to $3.36 million. In remitting the award, the district
court explained that it agreed with North Atlantic’s “most
basic argument: $8.4 million is simply excessive given the
evidence of harm in this case.” Republic Tobacco L.P. v.
North Atlantic Trading Co., Inc., No. 98-C-4011, 

, at *7 (N.D. Ill. Nov. 23, 2003). We review the dis-
trict court’s remittitur decision for an abuse of discretion.
See McNabola v. Chicago Transit Authority, 

,
516 (7th Cir. 1993).
  North Atlantic contends that under Illinois law an award
of presumed damages may not be “substantial,” see Brown
& Williamson Tobacco Corp. v. Jacobson, 

,
1142 (7th Cir. 1987); Bloomfield v. Retail Credit Co., 

, 97 (Ill. App. Ct. 1973) (“Substantial damages are
not presumed.”), and that $3.36 million falls into this
impermissible category. By definition, presumed damages
are speculative in nature, and this limitation on presumed
damages protects a defamation defendant from being sub-
jected to an astronomical award based upon a jury’s guess
about the plaintiff’s unproven harm. In Brown & Williamson,
this Court explained Illinois law as requiring, “an appellate
court to give some deference to the jury’s determination of
presumed damages while also considering whether it con-
siders the jury award of presumed damages excessive. If it
finds the award excessive, the court may exercise discretion
and reduce the award to what it considers a more appropri-
ate 

.
   Following this principle, we hold that the district abused
its discretion in allowing $3.36 million in presumed damages.
We conclude that a presumed damages award of $1 million
is more appropriate in this case. Republic failed to identify
any presumed damages award in the history of Illinois law
26                                     Nos. 04-1098 & 04-1202

remotely in the vicinity of $3.36 million. (In fact, the most
sizeable award identified was the award of $1 million, re-
mitted from $3 million, in Brown & Williamson.) In a case
lacking proof of economic injury5 and where the defamatory
statements were publicized to a relatively limited audience
(North Atlantic’s customers and potential customers), it
would be inappropriate to award presumed damages that
are exponentially greater than have been awarded in past
cases. While we are mindful that under the doctrine of
presumed damages a party is not required to show specific
loss, there must be some meaningful limit on the magnitude
of a jury award when it is arrived at by pure speculation.
Presumed damages serve a compensatory function— when
such an award is given in a substantial amount to a party
who has not demonstrated evidence of concrete loss, it
becomes questionable whether the award is serving a dif-
ferent purpose. An award of $1 million is sizeable enough to
compensate Republic for the damage that we presume was
caused to its reputation in the tobacco industry and the
harm that we presume was done to the business rela-
tionships it cultivated over the years, yet not so substantial
as to be out of line with other presumed damages awards
allowed under Illinois law.
  Third, North Atlantic requests that the award of punitive
damages be reversed, arguing that they should not have
been allowed at all, or in the alternative, that the award
should be substantially remitted. We will consider these
arguments separately.
  North Atlantic argues that the conduct at issue in this
case does not meet the demanding standard for awarding
punitive damages under Illinois law. In a diversity proceeding,


5
   Indeed, the failure to prove economic injury prompted the dis-
trict court to grant North Atlantic summary judgment on Republic’s
tortious-interference claim—a ruling from which Republic has not
cross-appealed, but a cause of action in which this case seems to
most comfortably fit, putting the actual injury requirement aside.
Nos. 04-1098 & 04-1202                                      27

state law governs whether punitive damages are appropri-
ate. See Ross v. Black & Decker, Inc., 

, 1187 (7th
Cir. 1992). Punitive damages are available under Illinois law
upon proof of actual malice. See Brown & 

; see also J.I. Case Co. v. McCartin-McAuliffe
Plumbing & Heating, Inc., 

, 263 (Ill. 1987)
(explaining that punitive damages may be awarded when
the defendant acts “with fraud, actual malice, deliberate
violence or oppression, or when the defendant acts willfully,
or with such gross negligence as to indicate a wanton
disregard for the rights of others”). As explained above, the
jury was instructed that in order to award punitive damages
it must find that the defendant acted with “knowledge or
conscious disregard”—a standard stricter than actual malice.
Since this is essentially a sufficiency of the evidence argu-
ment, we ask only whether a rational jury could conclude
that North Atlantic’s statements were made with knowl-
edge or reckless (or conscious) disregard of their falsity. A
rational jury could so conclude. Evidence was presented
that in order to gain a business advantage over its competi-
tor, North Atlantic made statements without regard to their
truth. The nature and timing of the events are probative of
North Atlantic’s willful intent—the combination of the
cutthroat competition that existed between the companies,
the substance of the letters, and the identity of the recipients
supports the conclusion that North Atlantic deliberately
used the letters to harm Republic’s business.
  We are more receptive to North Atlantic’s claim that the
amount of punitive damages awarded was excessive. The
jury awarded Republic $10.2 million in punitive damages,
which the trial court remitted to $4.08 million. In a diversity
action, state law governs the factors a jury may consider in
determining the amount of punitive damages, while federal
law governs the district court’s review of the jury award and
appellate review of the district court’s decision. See Black &

. We review the district court’s
determination on the size of the jury verdict for an abuse of
28                                   Nos. 04-1098 & 04-1202

discretion. 

law, three factors are particu-
larly relevant in analyzing the amount of a punitive
damages award: “(1) the nature and enormity of the wrong,
(2) the financial status of the defendant, and (3) the potential
liability of the defendant resulting from multiple claims.”
Hardin, Rodriguez & Boivin Anesthesiologists, Ltd. v.
Paradigm Ins. Co., 

, 640 (7th Cir. 1992) (citing
Hazelwood v. Illinois Central Gulf. Railroad, 

, 1207 (Ill. 1983)).
  We concentrate on the first factor. We generally agree
with the district court’s comprehensive analysis supporting
its decision to remit the jury’s punitive damage award, but,
in view of our discussion of presumed damages above, we
conclude that the district court did not go far enough in re-
mitting the punitive damage award. While evidence supports
the jury’s determination that North Atlantic acted with the
requisite malice to justify punitive damages, the “nature
and enormity of [North Atlantic’s] wrong” does not justify
a $10.2 million award, or even a $4.08 million award. We
therefore further reduce the punitive damage award to $2
million.


C. Antitrust
  North Atlantic argues that the district court erred by
concluding that North Atlantic’s antitrust claims had to fail
on the ground that North Atlantic did not establish the
existence of a distinct geographic market. This Court’s re-
view of summary judgment is de novo. See Vision Fin. Group,
Inc. v. Midwest Family Mut. Ins. Co., 

, 642 (7th
Cir. 2004).
  North Atlantic’s antitrust claims included that Republic
(1) entered into unlawful agreements in unreasonable re-
straint of trade in violation of Section 1 of the Sherman Act,
see 15 U.S.C. § 1; (2) acted unlawfully to attempt to monop-
olize and monopolize in violation of Section 2 of the
Sherman Act, see 15 U.S.C. § 2; and (3) entered into unlawful
Nos. 04-1098 & 04-1202                                      29

exclusive dealing agreements that substantially lessen com-
petition in violation of Section 3 of the Clayton Act, see 15
U.S.C. § 14.
  A determination of the relevant market is ordinarily re-
quired for all of North Atlantic’s claims. However, as North
Atlantic argues, there are some circumstances where to
establish a violation of antitrust laws it is unnecessary to
prove that defendant wielded market power in a properly
defined product and geographic market, and may rely in-
stead on direct evidence of anticompetitive effects. See FTC v.
Indiana Fed’n of Dentists, 

, 460-61 (1986).
Relying on our decision in Toys “R” Us, Inc. v. FTC, 

(7th Cir. 2000), North Atlantic argues that this is
such a case. In Toys “R” Us, this Court upheld an Federal
Trade Commission finding that a powerful chain store
owner had coordinated a horizontal agreement among toy
manufacturers to restrict distribution to warehouse 

. Because the FTC had demonstrated that
the boycott organized by Toys “R” Us was having an effect
in the market, the Court held that the FTC did not need to
prove the contours of a distinct geographic market to state
an antitrust claim. See 

see also Indiana Fed’n of

(holding that, in light of direct
evidence of anticompetitive effects, the FTC did not need to
prove the contours of a distinct geographic market in order
to prove that a group of dentists had violated the antitrust
laws by agreeing not to provide insurers with x-rays when
submitting claims).
  North Atlantic’s reliance on Toys “R” Us is misplaced.
Toys “R” Us made very clear that despite the vertical agree-
ments between Toys “R” Us and individual manufacturers,
the conspiracy at issue was horizontal. Horizontal agree-
ments, which have not been alleged in this case, are illegal
per se. Unlike horizontal agreements between competitors,
vertical exclusive distributorships (like in this case) are pre-
sumptively legal. See CDC Techs., Inc. v. IDEXX Labs., Inc.,

, 80-81 (2d Cir. 1999). Rather than condemning
30                                    Nos. 04-1098 & 04-1202

exclusive dealing, courts often approve them because of their
procompetitive benefits. See, e.g., Roland Mach. Co. v. Dresser
Indus., Inc., 

, 395 (7th Cir. 1984) (exclusive deal-
ing eliminates divided loyalties and reduces free riding). In
fact, emphasizing the existence of a horizontal conspiracy,
Toys “R” Us contrasted the situation in that case with the
“typical story of a legitimate vertical transaction” in which
the manufacturer sought exclusivity in exchange for what
it hoped would be more effective promotion of its 

. As horizontal agreements are generally more
suspect than vertical agreements, we must be cautious about
importing relaxed standards of proof from horizontal
agreement cases into vertical agreement cases. To do so
might harm competition and frustrate the very goals that
antitrust law seeks to achieve. Cf., e.g., Monsanto Co. v.
Spray-Rite Serv. Corp., 

, 763-64 (1984) (noting
the dangers of imposing too low a standard of proof in anti-
trust cases); InterVest, Inc. v. Bloomberg, L.P., 

(3d Cir. 2003) (citing the “chilling effect on lawful conduct
that would result from the unreasonable interpretation of
evidence”).
   Nonetheless, the fact that “direct evidence of anticompe-
titive effects” has not been used outside the context of horizon-
tal agreements does not entirely dispose of North Atlantic’s
argument. It may be that, in a proper case alleging vertical
restraints, a direct anticompetitive effects analysis could be
used to show market power. But this is not that case. North
Atlantic fails to recognize that neither Toys “R” Us nor
Indiana Federation of Dentists allows an antitrust plaintiff
to dispense entirely with market definition. Rather, these
cases stand for the proposition that if a plaintiff can show
the rough contours of a relevant market, and show that the
defendant commands a substantial share of the market,
then direct evidence of anticompetitive effects can establish
Nos. 04-1098 & 04-1202                                             31

the defendant’s market power6—in lieu of the usual show-
ing of a precisely defined relevant market and a monopoly
market share.
  For example, in Indiana Federation of Dentists, there was
no dispute that the product market was, roughly speaking,
dental services; all seemed to agree to “the reality that mar-
kets for dental services tend to be relatively localized”; and
the FTC found “adverse effects on competition in those areas
where IFD dentists predominated.” Ind. Fed’n of 

(emphasis added). In other words, there was no
significant dispute about the rough contours of the relevant
market, and the FTC’s findings only applied where the IFD
dentists commanded a substantial market share. Likewise
in Toys “R” Us, the product market (the wholesale toy mar-
ket) was not contested; the geographic market was assumed
to be national; and Toys “R” Us had “20% of the national
wholesale market and up to 49% of some local wholesale
markets.” Toys “R” 

. These circumstances
were enough, we held, to allow an inference of market power
from direct evidence of anticompetitive effects.
  The situation before us now is entirely different because
of the dispute about the relevant geographic market. Toys
“R” Us and Indiana Federation of Dentists do not excuse
North Atlantic from providing evidentiary support for its
putative Southeast geographic market. Economic analysis
is virtually meaningless if it is entirely unmoored from at
least a rough definition of a product and geographic market.
As we explain below, there is no evidentiary support for the
putative Southeast geographic market. Therefore, North
Atlantic cannot even cross the threshold into a Toys “R” Us-




6
   Indeed, even the references to “plaintiff” and “defendant” are ques-
tionable, as both Toys “R” Us and Indiana Federation of Dentists
originated not as private-party civil litigation, but as agency pro-
ceedings before the Federal Trade Commission.
32                                  Nos. 04-1098 & 04-1202

style proof of market power through direct evidence of
anticompetitive effects.
  Thus, because North Atlantic can draw no support from
Toys “R” Us or Indiana Fed’n of Dentists, and exclusive deal-
ing arrangements violate antitrust laws only when they
foreclose competition in a substantial share of the line of
commerce at issue, see Tampa Electric Co. v. Nashville Coal
Co., 

, 320-27 (1961), North Atlantic must pre-
cisely establish a relevant market. The relevant market has
both a product and a geographic dimension. See Brown Shoe
Co. v. United States, 

, 324 (1962). The parties
agree that the relevant product market is the market for
premium RYO cigarette papers. The relevant geographic
market, however, is disputed. North Atlantic contends that
the market is limited to the Southeast region of the United
States, which it defines as Alabama, Florida, Georgia,
Kentucky, Mississippi, North Carolina, South Carolina,
Tennessee, and Virginia. Republic counters that the relevant
market is nationwide and that North Atlantic has failed to
establish sufficient facts to demonstrate that the nine states
that make up the so-called Southeast are in fact a relevant
market.
  Identifying a geographic market requires both, “careful
selection of the market area in which the seller operates,
and to which the purchaser can practicably turn for sup-
plies.” Tampa 

. Applying the two-
part test to this case, the district court concluded that the
only possible market supported by the evidence is national,
and that it was therefore unnecessary to present the ques-
tion to a jury. We agree.
  With respect to the first prong, it is undisputed that North
Atlantic, Republic, and their competitors operate nationally
and sell to wholesale customers all over the United States.
All three of the top suppliers (North Atlantic, Republic and
RBA) publish national price lists.
Nos. 04-1098 & 04-1202                                    33

  With respect to the second prong, Republic presented
unrebutted evidence that distributors and wholesalers can
practicably (and in fact do) turn to suppliers across the
nation for RYO cigarette paper. Before the district court,
North Atlantic argued that the relevant purchasers were
indirect customers (i.e., retailers and consumers) rather
than the direct customers (i.e., distributors and wholesal-
ers)—a position the district court rejected and that North
Atlantic does not explicitly now reassert. Rather, North
Atlantic contends on appeal that Republic’s sales contracts
(which included restrictions on buying or selling Republic’s
product to or from other wholesalers) made it impossible for
wholesalers to turn to outside suppliers for Republic’s
products outside of their region. This argument puts the
cart before the horse—contracts represent transactions that
have occurred within the market. The question of what
transactions have occurred in the market is subsequent to
and therefore irrelevant to the definition of the market
itself.
  Additionally, North Atlantic argues that as a result of
barriers to entry caused by “transportation costs and the
realities of the market,” wholesalers outside the Southeast
are not well-positioned to enter the region to sell competing
product. Even if this convenience-based argument could
meet the Tampa Electric standard of practicability, this
argument (and to some extent the argument previously
discussed) reverts to the position advanced at the district
court that consumers and retailers are the “purchasers” for
purposes of the geographic analysis. This is wrong because
Republic and North Atlantic do not sell cigarette papers to
retailers and consumers. They sell to distributors and
wholesalers. Accordingly, the evidence presented regarding
where wholesalers can practicably sell their products (or in
other words, where customers and retailers practicably turn
for alternative sources of RYO paper) is beside the point
when it comes to market definition. Thus, the primary defect
34                                   Nos. 04-1098 & 04-1202

in North Atlantic’s geographic argument remains— North
Atlantic has not identified any evidence presented at trial
indicating that wholesalers and distributors in the South-
east because of market forces were only able to turn to
suppliers in that region.
  This conclusion is hardly surprising, as tobacco products
generally have been found to have national markets. See,
e.g., FTC v. Swedish Match, 

, 166 (D.D.C.
2000) (loose leaf chewing tobacco); R.J. Reynolds Tobacco Co.
v. Philip Morris Inc., 

, 504 (M.D.N.C.
1999) (cigarettes).
  As there is no genuine issue that the relevant geographic
market in this case is a national market, and North Atlantic
does not argue that Republic has a monopoly or has attempted
to monopolize in the national market, summary judgment
was appropriately granted on all of North Atlantic’s anti-
trust claims.


D. Cross-Appeal
  On cross-appeal, Republic challenges “the longstanding
rule that a plaintiff in a federal court . . . may not appeal
from a remittitur order he has accepted.” Donovan v. Penn
Shipping Co., Inc., 

, 650 (1977). An order that
offers a choice between a remitted award and a new trial is
not a final decision, and if a plaintiff agrees to accept the
reduced judgment in the trial court, that plaintiff may not
later argue that the jury’s verdict should be reinstated on
appeal. 

the plaintiff declines to accept the
reduced award, no appeal may be taken until after a new
trial. See Ash v. Georgia-Pacific Corp., 

, 437 (7th
Cir. 1992). Because Republic accepted the remittitur here,
instead of facing a second trial, it cannot challenge the
remittitur. See 

Nos. 04-1098 & 04-1202                                     35

  However, Republic contends that Ash allows for a third
option for successful plaintiffs facing remittitur—stipulat-
ing that a second trial would result in entry of judgment in
the amount equal to the remitted award and appeal the
remittitur based on that stipulation—and the district court
erred in refusing to allow Republic to pursue this course.
Republic argues that absent this option, in order to obtain
appellate review of a remittitur, a successful plaintiff must
undertake a seemingly endless series of new trials—until
one jury produces a verdict that squares with the trial judge’s
view of an appropriate verdict. We disagree with Republic’s
reading of Ash. Ash suggests that a plaintiff may expedite
appeal by taking “a pratfall” on a new trial, meaning that
the plaintiff can accept defeat in the second trial by failing
to put up a real fight and then appeal seeking reinstate-
ment of the first jury’s verdict. Ash explained that if a
plaintiff “cannot afford the same elaborate presentation it
mustered the first time, or if the absence of witnesses . . .
undermines the case, then [the plaintiff] may do poorly—
but it has the first verdict to fall back on. A party electing
the new-trial branch of the remittitur option may take a prat-
fall as quickly as it pleases, and thus expedite the appeal.”

Nowhere does Ash suggest that the Donovan
may be completely circumvented by simply stipulating that
a second trial would result in a judgment equal to the re-
mitted award. We therefore reject Republic’s invitation to
sanction such a procedure.


                      III. Conclusion
   For the reasons given in this opinion, we AFFIRM the dis-
trict court’s grant of summary judgment to Republic on its
defamation claim and North Atlantic’s antitrust claims. We
AFFIRM the district court’s decision with respect to Repub-
lic’s cross-appeal. We VACATE the district court’s remitted
36                                Nos. 04-1098 & 04-1202

damages award and order entry of judgment for $1 million
in presumed damages and $2 million in punitive damages.
A true Copy:
      Teste:

                      ________________________________
                      Clerk of the United States Court of
                        Appeals for the Seventh Circuit




                  USCA-02-C-0072—9-1-04