Euromodas, Inc. v. Zanella, Ltd., 03-1712.

CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)
Writing for the CourtSelya
Citation368 F.3d 11
PartiesEUROMODAS, INC., Plaintiff, Appellant, v. ZANELLA, LTD. and Clubman, Inc., Defendants, Appellees.
Docket NumberNo. 03-1712.,03-1712.
Decision Date17 May 2004
368 F.3d 11
EUROMODAS, INC., Plaintiff, Appellant,
ZANELLA, LTD. and Clubman, Inc., Defendants, Appellees.
No. 03-1712.
United States Court of Appeals, First Circuit.
Heard March 2, 2004.
Decided May 17, 2004.

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Armando Llorens, with whom Dora Peñagarícano and McConnell Valdés were on brief, for appellant.

José L. Barreto-Rampolla, with whom Rivera, Barreto & Torres Marcano was on brief, for appellee Clubman, Inc.

Edna Hernández-Arroyo, with whom María Luísa Martínez-López, Avila, Martínez & Hernández, PSC, Lawrence Fechner, and Jaffe, Segal & Ross were on brief, for appellee Zanella, Ltd.

Before SELYA, Circuit Judge, COFFIN, Senior Circuit Judge, and LIPEZ, Circuit Judge.

SELYA, Circuit Judge.

This antitrust case, which requires us to clarify what sort of evidence a plaintiff must adduce to make out a trialworthy claim for a vertical restraint of trade, presents a question of first impression in this circuit. We turn to this question mindful that vertical restraints have "provoked more reconsideration of established rules, or more disagreement between courts and commentators" than most other areas of antitrust law. Herbert Hovenkamp, Federal Antitrust Policy: The Law of Competition and Its Practice § 11.1, at 441 (2d ed.1999).


We begin with the cast of characters. Plaintiff-appellant Euromodas, Inc. is a corporation engaged in the retail sale of men's clothing. Defendant-appellee Clubman, Inc. is engaged in the same business. The two retailers are direct competitors in San Juan, Puerto Rico. Defendant-appellee Zanella, Ltd. is an Italian manufacturer of fine men's clothing. Until 1997, both Euromodas and Clubman sold Zanella trousers. What happened thereafter propelled the parties from the marketplace to the federal courthouse.

Euromodas alleges that Clubman, which operates a large number of stores in Puerto Rico, used its market power to force

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Zanella into a minimum resale price maintenance scheme. Euromodas claims that this scheme was in part intended to — and did — restrict its access to Zanella pants. Because this appeal arises in an unusual posture, see infra Part II, we defer further development of the background facts until we reach the merits of the antitrust claim.

For the nonce, it suffices to say that Euromodas, endeavoring to regain its competitive footing, sued both Clubman and Zanella in the federal district court. It alleged a violation of section 1 of the Sherman Act, 15 U.S.C. § 1. After pretrial discovery had been completed, all three parties moved for summary judgment. The district court granted the defendants' motion and denied the plaintiff's cross-motion. Euromodas, Inc. v. Zanella, Ltd., 253 F.Supp.2d 201 (D.P.R.2003).

The district court's decision comprised three discrete but interdependent rulings. Initially, the court determined that the plaintiff — Euromodas — had not complied with local procedural rules. Id. at 203-04. This determination shaped the court's conception of which parts of the record could be considered on summary judgment. Viewing the case through that prism, the court ruled that the plaintiff had not adduced sufficient evidence of concerted action to fix prices and, thus, had failed to make out an antitrust violation. Id. at 205-06. Along the way, the court denied the plaintiff's cross-motion for summary judgment on the ground that it did not comply with the court's local rules. Id. at 204 n. 5 (discussing D.P.R.R. 311.12).

This appeal followed. In it, the plaintiff (i) challenges the district court's resolution of the procedural issue; (ii) assigns error to the court's entry of summary judgment for the defendants; and (iii) protests the denial of its cross-motion for brevis disposition.


Our logical starting point is the procedural issue, for its resolution will determine what facts properly comprised the summary judgment record and, thus, what facts the lower court should have considered in deciding whether to grant summary judgment. This inquiry centers on D.P.R.R. 311.12.1 The District of Puerto Rico promulgated that rule to aid in the task of identifying genuine issues of material fact that might affect the entry of summary judgment. See, e.g., Ruiz Rivera v. Riley, 209 F.3d 24, 28 (1st Cir.2000).

The local rule imposes bilateral obligations. It requires that a party who moves for summary judgment submit, in support of the motion, "a separate, short, and concise statement of the material facts as to which the moving party contends there is no genuine issue to be tried and the basis of such contention as to each material fact, properly supported by specific reference to the record." D.P.R.R. 311.12. In turn, the rule requires a party opposing a summary judgment motion to include with its opposition a short and concise statement "of the material facts as to which it is contended that there exists a genuine issue to be tried," with proper record citations. Id. The penalty for failure is potentially harsh; the facts delineated in the movant's statement will be "deemed to be admitted unless controverted by the statement required to be served by the opposing party." Id.

Rules such as Local Rule 311.12 were adopted pursuant to a suggestion of this court, see Stepanischen v. Merchants Despatch

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Transp. Corp., 722 F.2d 922, 931-32 (1st Cir.1983), and we consistently have upheld their use, see, e.g., Cosme-Rosado v. Serrano-Rodriguez, 360 F.3d 42, 45 (1st Cir.2004); Ruiz Rivera, 209 F.3d at 28. Here, however, the issue is not the enforceability of the local rule but, rather, how it applies to oppositions to summary judgment motions. Specifically, the plaintiff questions the way in which the district court, based on its reading of the local rule, restricted its consideration of the plaintiff's evidence in analyzing the defendants' summary judgment motion.2 In an effort to put matters into perspective, we explain what transpired.

Zanella moved for summary judgment in full compliance with Local Rule 311.12 (Clubman joined Zanella's motion and we need not discuss separately its quest for summary judgment). When the plaintiff served its opposition, it omitted a separate statement listing controverted material facts. The district court perceived this omission as a "blatant disregard" of Local Rule 311.12, proceeded to "deem as admitted the relevant uncontested facts submitted by Zanella with its motion for summary judgment," and limited the summary judgment record to those facts. Euromodas, 253 F.Supp.2d at 203-04.

The plaintiff asserts that this approach constituted error. It tells us that it complied with the imperatives of Local Rule 311.12 notwithstanding its failure to formulate a separate statement of controverted material facts. Therefore, its thesis runs, the district court, while entitled to deem the defendants' assertions of fact admitted, also should have taken the facts identified in the plaintiff's opposition fully into account.

We conclude that the district court erred in its interpretation of the local rule. The court found Euromodas to have violated Local Rule 311.12 merely because it did not include a separate statement of disputed facts with its opposition. But Local Rule 311.12, as written, does not always require that a party opposing summary judgment put forth its version of the facts in a separate statement. The rule requires only that the nonmovant identify any facts in the movant's statement with which it takes issue. See D.P.R.R. 311.12. In other words, an opposing party is required to file such a statement only if (and to the extent that) it wishes to register and preserve a potential dispute as to one or more of the facts advanced by the movant.

In this instance, Euromodas was content to accept the facts proffered by the defendants, so the district court appropriately treated those facts as admitted. The plaintiff, however, regarded those facts as incomplete, and it desired to augment them with further facts — facts that it viewed as undisputed and which were neither inconsistent with nor contradictory to those contained in the movants' Local Rule 311.12 statement. The local rule, as it existed at that time, did not require those additional facts to be presented in a particular form.3 Because those additional facts were supported by the record, the

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lower court should have considered them (while at the same time accepting the facts set forth in the movants' Local Rule 311.12 statement). Its failure to do so constituted error.


This error does not necessarily require reversal. After all, we afford de novo review to orders granting or denying summary judgment. Podiatrist Ass'n, Inc. v. La Cruz Azul de P.R., Inc., 332 F.3d 6, 13 (1st Cir.2003); Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.1990). And, moreover, we are not wedded to the trial court's reasoning, but, rather, may sustain its decree on any ground made manifest in the record. Houlton Citizens' Coalition v. Town of Houlton, 175 F.3d 178, 184 (1st Cir.1999). Consequently, we undertake an examination of the full summary judgment record in order to assess the supportability of the lower court's order. Accord Rathbun v. AutoZone, Inc., 361 F.3d 62, 70-80 (1st Cir.2004) (proceeding in this manner).


Section 1 of the Sherman Act prohibits "[e]very contract, combination... or conspiracy, in restraint of trade or commerce." 15 U.S.C. § 1. There are two prerequisites for a successful section 1 claim. First, there must be concerted action. Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984); Podiatrist Ass'n, 332 F.3d at 12. Second, the actors' agreement must involve either restrictions that are per se illegal or restraints of trade that fail scrutiny under the rule of reason. Monsanto, 465 U.S. at 761, 104 S.Ct. 1464; Podiatrist Ass'n, 332 F.3d at 12.

In this instance, the plaintiff's case hinges on the interposition of what is alleged to be...

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