385 F.3d 350 (3rd Cir. 2004), 03-2920, In re Flat Glass Antitrust Litigation

Docket Nº:03-2920.
Citation:385 F.3d 350
Party Name:In re FLAT GLASS ANTITRUST LITIGATION (MDL No. 1200) Brian S. Nelson, d/b/a Jamestown Glass Service; Mel's Auto Glass, Inc.; A. Waxman & Co., on behalf of itself, and all others similarly situated; Designer Windows, Inc., on behalf of itself and all others similarly situated; Moses Moore all Glass Aspects, Inc., on behalf of itself and all others s
Case Date:September 29, 2004
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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385 F.3d 350 (3rd Cir. 2004)

In re FLAT GLASS ANTITRUST LITIGATION (MDL No. 1200)

Brian S. Nelson, d/b/a Jamestown Glass Service; Mel's Auto Glass, Inc.; A. Waxman & Co., on behalf of itself, and all others similarly situated; Designer Windows, Inc., on behalf of itself and all others similarly situated; Moses Moore all Glass Aspects, Inc., on behalf of itself and all others similarly situated; AAA Glass, Inc., on behalf of itself and all others similarly situated, d/b/a The Glass Doctor; The Lurie Companies, Inc.; VSTB Enterprises, Inc., d/b/a Perfecto Auto Glass & Upholstery and its successors; Port City Glass & Mirror, Inc., on its own behalf and on behalf of all others similarly situated; John Healy, Jr.; County Auto Glass, Inc., on behalf of themselves and all others similarly situated; Gerard J. Clabbers, on behalf of himself and all others similarly situated; Kirschner Corporation, Inc., t/a Berwyn Glass Company, on behalf of itself and all others similarly situated; Hartung Agalite Glass Co., d/b/a Hartung Glass Industries; All Star Glass, Inc., on behalf of itself and all others similarly situated; Superior Windshield Installation, Inc., on behalf of itself and all others similarly situated; Jovi, Inc., on behalf of itself and all others similarly situated, t/a Easton Area Glass; Engineered Glass Walls, Inc., on behalf of itself and all others similarly situated; Bailes Glass Co.; Interstate Glass Distributors, Inc., on behalf of itself and all others similarly situated; Orlando Auto TOP, Inc.; Mayflower Sales Co., Inc., on behalf of itself and all others similarly situated; Cardinal IG; Reed's Body Shop, Inc.; Beletz Brothers Glass Company, Inc.; Complast, Inc.; Western States Glass, on behalf of itself and all others similarly situated; Grimes Auto Glass, Inc.; D & S Glass Services, Inc.; George Brown & Son Glass Works, Inc.; Thermal Chek, Inc.; Mobile Glass, Inc., individually and as a representative of a class; Jeld-Wen, Inc., an Oregon Corporation; Jeld-Wen Canada Limited, a Canadian corporation; Jeld-Wen Arizona, Inc., an Arizona corporation; Avanti Industries, Inc., an Arizona corporation; Lakewood City Glass, Inc.; Carolina Mirror; Allstate Insurance Company; Allstate Indemnity Company

v.

Pilkington PLC; Pilkington Libbey-Owens-Ford Co., Inc.; AFG Industries, Inc.; Guardian Industries Corporation; PPG Industries, Inc.; Libbey-Owens-Ford Co., Inc.; Asahi Glass Co., Ltd.; Ford Motor Co.; Pilkington Holdings; Asahi Glass America, Inc. United States of America (Intervenor in D.C.) (D.C. No. 97-mc-00550) Class Plaintiffs and Grimes Auto Glass, Appellants.

No. 03-2920.

United States Court of Appeals, Third Circuit

September 29, 2004

Argued June 22, 2004

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[Copyrighted Material Omitted]

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Samuel Issacharoff, New York, NY, Daniel E. Bacine, Barrack, Rodos & Bacine, Philadelphia, PA, Eugene Spector, Spector Roseman & Kodroff, Philadelphia, PA, Robert N. Kaplan, (Argued), Richard J. Kilsheimer, Kaplan Fox & Kilsheimer, New York, NY, Michael D. Hausfeld, Cohen Milstein Hausfeld & Toll, Washington, D.C., Robert Skirnick, Meredith Cohen Greenfogel & Skirnick, New York, NY, for Appellants.

Paul M. Dodyk, (Argued), Peter T. Barbur, Lawrence E. Buterman, Kelly A. Rocco, Cravath, Swaine & Moore, New York, NY, David J. Armstrong, Dickie, McCamey & Chilcote, Pittsburgh, PA, for Appellee PPG Industries, Inc.

J. Michael Murray, (Argued), Berkman, Gordon, Murray & DeVan, Cleveland, OH, for Appellee Edward Bryant.

Michael S. Sommer, McDermott, Will & Emery, New York, NY, Elliot Silverman, (Argued), McDermott, Will & Emery, Irvine, CA, for Appellee Ronald W. Skeddle.

Before NYGAARD, MCKEE and CHERTOFF, Circuit Judges.

OPINION

CHERTOFF, Circuit Judge.

This case addresses the recurring question of what quantity and quality of evidence suffices to create a genuine issue of material fact as to one particular element of a claim under Section 1 of the Sherman Act: whether a defendant entered into an unlawful agreement. Appellants contend

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that appellee PPG Industries, Inc. ("PPG") conspired with its competitors to fix the prices of flat glass and automotive replacement glass in the early 1990s. The District Court granted PPG's motion for summary judgment on the ground that there was insufficient proof of an agreement. We will reverse in part, affirm in part, and remand for additional proceedings.

I. Background

A. The Flat Glass and Automotive Replacement Glass Industries

PPG manufactures sheets of glass through a method called the "float process." Molten glass is poured over a bath of higher-density liquid, such as molten tin. As the glass floats on top of the bath, it is polished under controlled temperatures. Finally, the glass is fed into an "annealing oven" where it gradually cools and hardens. See In re Flat Glass Antitrust Litigation, 191 F.R.D. 472, 476 n. 7 (W.D.Pa.1999). The glass that PPG produces through the float process-in various sizes, thicknesses, and tints, see Supp.App. 14 n. 16; App. 634-is called "flat glass."

PPG and a handful of other firms-Libbey-Owens-Ford Company ("LOF," a subsidiary of the British glass producer Pilkington LLC); AFG Industries, Inc. ("AFG," a subsidiary of the Japanese glass producer Asahi Glass Co.); 1 Guardian Industries ("Guardian"); and Ford Motor Co. ("Ford")-manufacture well over ninety percent of the flat glass sold in the United States. In 1995, for example, PPG accounted for approximately 28% of domestic flat glass shipments, LOF and AFG each accounted for 19%, and Guardian and Ford each accounted for 15%. Supp.App. 20. 2

Flat glass produced through the float process may be sold "as is," in which case it is used primarily in construction. Supp.App. 16. Alternatively, many different products may be "fabricated" from flat glass by subjecting it to a variety of processes. A substantial amount of flat glass, for example, is fabricated for use in automobiles. Flat glass may be molded and combined with other parts to produce windshields, for example, or side and rear windows. Supp.App. 19. Some products-called original equipment manufacturer products ("OEM" glass products)-are fabricated for sale to vehicle manufacturers for use in new vehicles. Other products-called automotive replacement glass products-are fabricated for sale and use as automotive replacement parts. Supp.App. 25. These are two separate markets. 3

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The automotive replacement glass market has a four-tier vertical structure. First, manufacturers-the handful of firms mentioned above-produce flat glass. Second, various companies fabricate the flat glass into different types of automotive replacement glass products. The major United States fabricators of automotive replacement glass products during the class period were PPG, LOF, Ford, Guardian, Safelite, Viracon, Premier/Hordis, and Chrysler. App. 585. Thus a number of firms, such as PPG, both manufacture flat glass and fabricate it into automotive replacement glass products. 4

Third, the fabricators sell the parts by the "truckload" to wholesale distributors. The wholesale distributors then sell the automotive replacement glass products in less than truckload quantities to the retail installers that sell the products directly to car owners.

PPG operates at every level of the automotive replacement glass market; that is, PPG is "vertically integrated." In addition to manufacturing flat glass and fabricating automotive replacement glass products, PPG runs a wholesale distribution operation that sells less than truckload quantities to retail installers. Yet PPG also sells its products to its downstream competitors. It sells flat glass to automotive replacement glass fabricators, and it sells truckload quantities of automotive replacement glass products to wholesale distributors.

B. The Alleged Conspiracies

In 1993, LOF fired two of its executives-Ronald Skeddle (LOF's President and Chief Executive Officer) and Edward Bryant (LOF's Executive Vice President, the company's second-highest ranking officer)-and a grand jury indicted them for conspiracy, mail and wire fraud, and money laundering. A jury eventually acquitted them of the charges, but in the meantime Skeddle and Bryant alleged that during the early 1990s LOF had conspired with its competitors to fix the price of the glass products it sold. See In re Flat Glass Antitrust Litigation, 288 F.3d 83, 86 (3d Cir. 2002).

Skeddle and Bryant's allegations spurred plaintiffs to file several private antitrust lawsuits against LOF and its competitors (PPG, AFG, Ford, and Guardian), and the Judicial Panel on Multidistrict Litigation eventually consolidated and transferred the actions to the Western District of Pennsylvania. After the District Court certified two subclasses of plaintiffs, see In re Flat Glass Antitrust Litigation, 191 F.R.D. 472, 475 (W.D.Pa.1999), plaintiffs reached settlements with all defendants except PPG.

Plaintiffs allege that PPG and its competitors conspired to "fix, raise, and maintain" the prices of flat glass and automotive replacement glass. The two alleged conspiracies correspond with the two subclasses that the District Court certified. See In re Flat Glass Antitrust Litigation, 191 F.R.D. at 475. One subclass consists of individuals and entities that purchased flat glass or products fabricated from flat glass from PPG, LOF, Guardian, Ford, or AFG. The other subclass consists of individuals and entities that purchased automotive replacement glass products from any of those same firms. Id.

Plaintiffs' allegations regarding price-fixing in the market for flat glass are relatively straightforward. Several times during the class period, PPG and the other

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flat glass producers raised their "list prices" for flat glass by the same amount and within very close time frames. Within a twelve-day period in the summer of 1991, for example, PPG and its competitors all raised...

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