Summary Judgment In Antitrust Cases
Both California and federal decisions urge caution in granting a defendant's motion for summary judgment "'in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot.'" (Corwin v. Los Angeles Newspaper Service Bureau, Inc. (1971) 4 Cal. 3d 842, 852, 94 Cal. Rptr. 785, 484 P.2d 953, quoting Poller v. Columbia Broadcasting (1962) 368 U.S. 464, 473, 7 L. Ed. 2d 458, 82 S. Ct. 486.)
Because direct evidence of the requisite agreement is rarely available, it may and often must be inferred from circumstantial evidence (Alfred M. Lewis, Inc. v. Warehousemen etc. Local No. 542 (1958) 163 Cal. App. 2d 771, 778-779, 330 P.2d 53), including the nature of the acts done, the relationship and interests of the parties, and the individual circumstances of each case. (Saxer v. Philip Morris, Inc. (1975) 54 Cal. App. 3d 7, 20, 126 Cal. Rptr. 327.)
However, caution is not the same as prohibition, and summary judgment remains available to defendants in an antitrust lawsuit. (Sherman v. Mertz Enterprises (1974) 42 Cal. App. 3d 769, 775, 117 Cal. Rptr. 188 ["'this rule of caution should not be allowed to sap the summary judgment procedure of its effectiveness'"];
Biljac, supra, 218 Cal. App. 3d 1410, 267 Cal. Rptr. 819 [affirming grant of summary judgment in Cartwright Act conspiracy claim].)
The federal courts have concluded that an important aspect of evaluating a defendant's motion for summary judgment in an antitrust case is the extent to which a plaintiff can avoid summary judgment by relying solely on circumstantial evidence from which to infer the requisite agreement.
If the plaintiff cannot show the illegal agreement by direct evidence and relies on inferences from the defendant's overt actions and the impacts of those actions, the plaintiff may not avoid summary judgment by inferring the agreement if the overt actions and impacts are equally explicable by benign competitive motivations or the economic milieu within which the defendant's industry operates as by an illegal agreement.
Numerous federal courts, following the rules articulated in Matsushita Elec. Industrial Co. v. Zenith Radio (1986) 475 U.S. 574, 89 L. Ed. 2d 538, 106 S. Ct. 1348, have concluded that although the inferences to be drawn from the facts must be viewed most favorably to the party opposing the motion for summary judgment, there are limits on the range of permissible inferences that may be drawn from ambiguous circumstantial evidence.
As developed by the federal courts, this rule provides that conduct "as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy." (Id. at p. 588.)
To survive a motion for summary judgment, the plaintiff in an antitrust action must present evidence "that tends to exclude the possibility" that the alleged conspirators acted independently. In Wallace v. Bank of Bartlett (6th Cir. 1995) 55 F.3d 1166, the court summarized the proper approach at pages 1167-1168:
"Summary judgment may be granted even in a complex antitrust case because 'antitrust law limits the range of permissible inferences from ambiguous evidence in a [Sherman Act section] 1 case.' [Quoting Matsushita Elec. Industrial Co. v. Zenith Radio, supra, 475 U.S. at p. 588.] In Riverview Investments, Inc. v. Ottawa Community Improvement Corp., [6th Cir., 1990] 899 F.2d 474 . . ., we established a two-part inquiry for evaluating a summary judgment motion in an antitrust conspiracy case:
(1) Is the plaintiff's evidence of conspiracy ambiguous, i.e., is it as consistent with the defendants' permissible independent interests as with an illegal conspiracy; and, if so, (2) is there any evidence that tends to exclude the possibility that the defendants were pursuing these independent interests. [Id. at p. 483 (citation omitted).]
We held that a plaintiff cannot demonstrate a conspiracy 'if, using ambiguous evidence, the inference of a conspiracy is less than or equal to an inference of independent action.' [Ibid.]"
The federal courts have adopted this limitation on permissible inference, citing one or both of two distinct rationales.
The first rationale is based on the substantive policy of the antitrust laws to foster competition that leads to more and better goods and services at lower prices for consumers. (See National Society of Professional Engineers v. United States (1978) 435 U.S. 679, 695, 55 L. Ed. 2d 637, 98 S. Ct. 1355.)
If courts permit a plaintiff to infer a conspiracy from purely legitimate behavior, businesses would be deterred from engaging in the precise behavior antitrust laws wish to foster. (See Matsushita Elec. Industrial Co. v. Zenith Radio, supra, 475 U.S. at pp. 593-594; Monsanto Co. v. Spray-Rite Service Corp. (1984) 465 U.S. 752, 763-764, 79 L. Ed. 2d 775, 104 S. Ct. 1464; Brooke Group, Ltd. v. Brown & Williamson Tobacco Corp. (1993) 509 U.S. 209, 223-226, 125 L. Ed. 2d 168, 113 S. Ct. 2578; Rossi v. Standard Roofing, Inc. (3d Cir. 1998) 156 F.3d 452; T.W. Elec. Service v. Pacific Elec. Contractors (9th Cir. 1987) 809 F.2d 626, 632, fn. 4.)
The second rationale derives from the summary judgment procedures under federal rules as refined by Celotex Corp. v. Catrett, supra, 477 U.S. 317, Anderson v. Liberty Lobby, Inc. (1986) 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 and Matsushita Elec. Industrial Co. v. Zenith Radio, supra, 475 U.S. 574.
Because the federal rules permit entry of summary judgment against a plaintiff under the "no evidence" approach, summary judgment is properly entered against the plaintiff if his counter-showing is insufficient to establish an essential element of his case on which he has the burden of proof at trial. (Celotex, supra, at p. 322.)
In deciding whether the counter-showing satisfies the burden plaintiff bears at trial, a court ruling on a motion for summary judgment "must be guided by the substantive evidentiary standards that apply to the case." (Anderson, supra, at p. 255.)
The federal courts have recognized that an antitrust plaintiff who relies on ambiguous circumstantial evidence from which to draw an inference of conspiracy bears the burden of proving the inference of conspiracy more likely than the inference of independent action.
The federal courts have reasoned that when the circumstantial evidence is equally consistent with the defendants' permissible independent interests as with an illegal conspiracy, the plaintiff will be unable to satisfy his burden of proof at trial from that evidence alone.
Accordingly, to avoid summary judgment the plaintiff must submit evidence that tends to exclude the possibility the defendants were pursuing independent interests; absent that additional evidence, the inference of a conspiracy is less than or equal to an inference of independent action, and will not satisfy plaintiff's trial burden.
Absent that additional evidence, the plaintiff lacks evidence to raise a triable issue of material fact and summary judgment for the defendant is proper. (See Richards v. Neilson Freight Lines (9th Cir. 1987) 810 F.2d 898, 903-904; Wilcox v. First Interstate Bank of Oregon, N.A. (9th Cir. 1987) 815 F.2d 522, 525, 528; Wallace v. Bank of Bartlett, supra, 55 F.3d at pp. 1167-1168; cf. Riverview Investments v. Ottawa Community Imp. (6th Cir. 1990) 899 F.2d 474, 483-485.)