Anderson News L.L.C. v. American Media, Inc., 071918 FED2, 15-2714-cv(L)

Docket Nº:15-2714-cv(L), 15-2889-cv(XAP), 15-2894-cv(XAP), 15-2903-cv(XAP)
Opinion Judge:Susan L. Carney, Circuit Judge
Party Name:Anderson News, L.L.C., Plaintiff-Counter-Defendant-Appellant-Cross-Appellee, v. American Media, Inc., Time Inc., Hearst Communications, Inc., Defendants-Counter-Claimants-Appellees-Cross-Appellants, Lloyd T. Whitaker, as the Assignee under an Assignment for the Benefit of Creditors for Anderson Services, L.L.C., Plaintiff-Appellant, Bauer ...
Attorney:Michael K. Kellogg (Joshua D. Branson, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Was h ing ton, DC; Marc E. Kasowitz, Hector Torres, Seth Davis, Kasowitz, Benson, Torrest & Friedman LLP, New York, NY, on the brief), Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Was h ingto n...
Judge Panel:Before: Livingston, Chin, and Carney, Circuit Judges.
Case Date:July 19, 2018
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
FREE EXCERPT

Anderson News, L.L.C., Plaintiff-Counter-Defendant-Appellant-Cross-Appellee,

Lloyd T. Whitaker, as the Assignee under an Assignment for the Benefit of Creditors for Anderson Services, L.L.C., Plaintiff-Appellant,

v.

American Media, Inc., Time Inc., Hearst Communications, Inc., Defendants-Counter-Claimants-Appellees-Cross-Appellants,

Bauer Publishing Co., LP., Curtis Circulation Company, Distribution Services, Inc., Hachette Filipacchi Media, U.S., Inc., Kable Distribution Services, Inc., Rodale, Inc., Time Warner Retail Sales & Marketing, Inc., Defendants-Appellees,

Hudson News Distributors LLC, The News Group, LP, Defendants,

v.

Charles Anderson, Jr., Counter-Defendant-Cross-Appellee.

Nos. 15-2714-cv(L), 15-2889-cv(XAP), 15-2894-cv(XAP), 15-2903-cv(XAP)

United States Court of Appeals, Second Circuit

July 19, 2018

File Date- August 6, 2018

Argued: December 2, 2016

Plaintiffs-appellants Anderson News, L.L.C., and Anderson Services, L.L.C., (together, "Anderson") appeal from an award of summary judgment to defendants on Anderson's allegation that, in early 2009, defendants conspired to boycott Anderson and drive it out of business, in violation of section 1 of the Sherman Act, 15 U.S.C. § 1. Anderson provided wholesaler services to the single-copy magazine industry: it was responsible for collecting single-copy magazines from publishers, delivering those magazines to retailers, accounting for the number of magazines sold, and recycling unsold magazines. In mid-January 2009, Anderson proposed charging publishers a delivery surcharge of $0.07 per magazine shipped, and called for publishers' agreement to the surcharge before February 2009 "to ensure future distribution." Defendants- appellees, a group of publishers and their distributors (which provide marketing and logistics services to the publishers), refused to pay the proposed surcharge and found wholesalers other than Anderson to deliver their magazines. Anderson sued the publishers and distributors, alleging a conspiracy in violation of antitrust laws to boycott Anderson and making various related state law claims. Some defendants counterclaimed, alleging that Anderson's proposed surcharge was itself the result of an unlawful conspiracy to raise prices.

The District Court granted summary judgment to defendants on Anderson's antitrust and state law claims, and to Anderson on the counterclaims. Reviewing the evidence in light of the totality of the circumstances and under the Matsushita "tends to exclude" standard, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986), we conclude that the District Court correctly ruled that Anderson has failed to offer sufficient evidence from which a reasonable jury could infer that defendants entered into such an unlawful agreement. We further conclude that the District Court correctly ruled that defendants did not suffer an antitrust injury and therefore lacked antitrust standing to pursue the stated counterclaims.

Affirmed.

Michael K. Kellogg (Joshua D. Branson, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Was h ing ton, DC; Marc E. Kasowitz, Hector Torres, Seth Davis, Kasowitz, Benson, Torrest & Friedman LLP, New York, NY, on the brief), Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Was h ingto n, DC, for Plaintiff- Counter-Defendant-Appellant-Cross-Appellee Anderson News L.L.C. and Counter-Defendant-Cross-Appellee Charles Anderson, Jr.

Thomas P. Lynch, Lynch Rowin LLP, New York, NY, for Plaintiff-Appellant Lloyd T. Whitaker, as the Assignee under Assignment for the Benefit of Creditors of Anderson Services, L.L.C.

David G. Keyko (Eric Xinis Fishman, on the brief), Pillsbury Winthrop Shaw Pittman LLP, New York, NY, for Defendant-Counter-Claimant-Appellee-Cross-Appellant American Media, Inc., and Defendant-Appellee Distribution Services, Inc.

Daniel N. Anziska, Kevin P. Wallace, Troutman Sanders LLP, New York, NY, for Defendant-Appellee Bauer Publishing Co., LP.

George G. Gordon (Jennings Durand, on the brief), Dechert LLP, Philadelphia, PA, for Defendant-Appellee Curtis Circulation Company.

Jay A. Katz (Isaac Michael Bayda, on the brief), McElroy, Deutsch, Mulvaney & Carpenter, LLP, New York, NY, for Defendant-Appellee Kable Distribution Services, Inc.

John M. Hadlock (Alexander Lycoyannis, on the brief), Rosenberg & Estis, P.C., New York, NY, for Defendant- Appellee Rodale, Inc.

Rowan D. Wilson (Thomas G. Rafferty, Antony L. Ryan, on the brief), Cravath, Swaine & Moore LLP, New York, NY, for Defendant-Counter-Claimant-Appellee-Cross- Appellant Time Inc. and Defendant-Appellee Time Wa rn er Retail Sales & Marketing, Inc.

Jonathan R. Donnellan, Eva M. Saketkoo, Hearst Corporation, Office of the General Counsel, New York, NY, for Defendant-Counter-Claimant-Appellee- Cross-Appellant Hearst Communications, Inc. (as successor-in-interest to Appellee Hachette Filipacchi Media U.S., Inc.).

Before: Livingston, Chin, and Carney, Circuit Judges.

Susan L. Carney, Circuit Judge

Plaintiffs-appellants Anderson News, L.L.C., and Anderson Services, L.L.C., (together, "Anderson") appeal from an award of summary judgment to defendants on Anderson's allegation that, in early 2009, defendants conspired to boycott Anderson and drive it out of business, in violation of section 1 of the Sherman Act, 15 U.S.C. § 1. At the time, Anderson provided wholesaler services to the single-copy magazine industry, in which magazines are published and sold individually to consumers (in contrast to sales by subscription). As a wholesaler, Anderson was responsible for collecting single-copy magazines from publishers, delivering those magazines to retailers, accounting for the number of magazines sold, and recycling unsold magazines.

In an effort to decrease the financial burden imposed on it by publishers' practice of shipping many more magazines than are sold, in mid-January 2009 Anderson announced that it would begin charging publishers a delivery surcharge of $0.07 per magazine shipped, and called for agreement to the surcharge before February 2009 "to ensure future distribution." J.A. 1450.1 Defendants-appellees, a group of publishers and their distributors (which provide marketing and logistics services to the publishers), refused to pay the proposed surcharge and found wholesalers other than Anderson to deliver their magazines. Anderson sued the publishers and distributors, alleging a conspiracy in violation of antitrust laws to boycott Anderson and making various related state law claims. Some defendants counterclaimed, alleging that Anderson's proposed surcharge was itself the result of an unlawful conspiracy to raise prices.

The District Court granted summary judgment to defendants on Anderson's antitrust and state law claims, and to Anderson on the counterclaims. Anderson now argues that the District Court ignored or too heavily discounted much of the evidence that Anderson presented in support of its claims, and maintains that it has offered sufficient evidence from which a jury could reasonably conclude that defendants entered into an unlawful agreement to refuse to deal with Anderson and to drive it out of business. Reviewing the evidence in light of the totality of the circumstances and under the Matsushita "tends to exclude" standard, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986), we conclude that the District Court correctly ruled that Anderson has failed to offer sufficient evidence that defendants entered into the alleged unlawful agreement to survive defendants' motions for summary judgment. We further decide that the District Court was correct in ruling that defendants did not suffer an antitrust injury and thus lacked antitrust standing to pursue the stated counterclaims. We therefore AFFIRM the District Court's judgments.

BACKGROUND

I. Factual background

The following statement of facts is drawn from the District Court's thorough recitation, supplemented by the parties' statements of undisputed fact under Federal Rule of Civil Procedure 56.1 and primary documents such as emails and other correspondence that are contained in the record. Although significant changes have doubtless since transpired, we describe relevant facts in this industry as they stood in 2008-2009, when the events in question occurred, as reflected by the record evidence.

In the United States, in 2009, publishers primarily sold magazines in two ways: by subscription and by single-copy purchase at a newsstand, supermarket, or another retailer. The single-copy magazine industry, which is our focus in this case, had long operated through four distinct levels of enterprise:

First, publishers created and produced magazines. Defendants Time Inc. ("Time"), American Media, Inc. ("AMI"), Bauer Publishing Co., LP. ("Bauer"), Rodale, Inc. ("Rodale"), and Hachette Filipacchi Media, U.S., Inc. ("Hachette") published a variety of magazines ranging from familiar titles like People and Star to more obscure titles like Yikes! and Twist. As of 2008, just before the events at issue here took place, sales of defendants' magazines constituted 42% of the U.S. single-copy market.

Second, distributors provided a variety of services, including marketing and billing services, to publishers. In 2008, four major distributors operated in the United States: defendants Time/Warner Retail Sales & Marketing, Inc. ("TWR"), Curtis Circulation Company ("Curtis"), Kable Distribution Services, Inc. ("Kable"), and non- defendant Comag. TWR represented only Time; Kable represented Bauer; Curtis represented Rodale, AMI, and Hachette; and defendant Distribution Services, Inc. ("DSI"), a wholly owned subsidiary of AMI, provided consulting and marketing services to AMI, Bauer, Rodale, and...

To continue reading

FREE SIGN UP