In re Polyurethane Foam Antitrust Litig., Case No. 1:10 MD 2196.

CourtUnited States District Courts. 6th Circuit. United States District Court of Northern District of Ohio
Writing for the CourtJACK ZOUHARY, District Judge.
Citation152 F.Supp.3d 968
Parties In re POLYURETHANE FOAM ANTITRUST LITIGATION. This document relates to: Direct Purchaser Class.
Docket NumberCase No. 1:10 MD 2196.
Decision Date09 February 2015

152 F.Supp.3d 968

In re POLYURETHANE FOAM ANTITRUST LITIGATION.

This document relates to: Direct Purchaser Class.

Case No. 1:10 MD 2196.

United States District Court, N.D. Ohio, Western Division.

Signed Feb. 9, 2015.


152 F.Supp.3d 974

Michael H. Steinberg, Adam S. Paris, Sullivan & Cromwell, Los Angeles, CA, for Plaintiffs.

MEMORANDUM OPINION AND ORDER RE: SUMMARY JUDGMENT

JACK ZOUHARY, District Judge.

Introduction

More than four years have passed since law enforcement authorities on two continents executed raids of some of the world's largest manufacturers of flexible polyurethane foam, on suspicion that some or all of the raided firms were active in a price-fixing conspiracy. Details of the search warrant and affidavit used in the United States raids became known after an inadvertent public filing on a federal court docket.

Dozens of lawsuits followed, filed by direct and indirect purchasers of foam products, who range from a person who purchased a foam pillow to large corporations like Ford Motor and Serta Mattress. The cases were consolidated in this Court for pretrial proceedings.

Millions of pages of discovery, hundreds of fact and expert witness depositions, and extensive motion practice ensued. This

152 F.Supp.3d 975

Court certified a nationwide class of direct purchasers (“Direct Purchasers”). The Carpenter Defendants, Leggett & Platt, Vitafoam, Inc. (“Vitafoam USA”), and Vitafoam Products Canada Ltd. (“Vitafoam Canada”) settled with Direct Purchasers. Defendant Woodbridge Foam Fabricating, Inc. (“Woodbridge Fabricating”) and two related non-defendant entities pled guilty to federal criminal charges for price-fixing in violation of the Sherman Act.

In six Motions for Summary Judgment (five individual motions and one joint motion), the non-settling Defendants (“Defendants”) now seek to end the Direct Purchasers' case (Docs. 1321–22, 1324–25, 1328–29). In more than four hundred pages of briefing, the parties argue the legal conclusions that must be drawn from a summary judgment record that overflows seven bankers boxes. This Court heard oral argument on the Motions (Doc. 1458). Its ruling follows.

Standard of Review

Summary Judgment Standard

Summary judgment is appropriate if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Federal Civil Rule 56(a). This Court must “consider all facts in the light most favorable to the non-movant and must give the non-movant the benefit of every reasonable inference.” Spirit Airlines, Inc. v. Nw. Airlines, Inc., 431 F.3d 917, 930 (6th Cir.2005) (internal quotation marks omitted). It may not weigh the evidence or make credibility judgments. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). But, “[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Expert Masonry, Inc. v. Boone County, Ky., 440 F.3d 336, 341 (6th Cir.2006) (internal quotation marks omitted).

It would be “imprecise” to describe the summary judgment standard, applied to an antitrust case, as “stringent.” Hyland v. HomeServs. of Am., Inc., 771 F.3d 310, 318 (6th Cir.2014). “[I]n defending against summary judgment, [Direct Purchasers] need not ‘eliminate all possible independent justifications [offered] by [Defendants],’ so that ‘only evidence of concerted action would be left in the record.’ They need, rather, to produce ‘evidence that tends to exclude the possibility of independent action.’ ” Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1365 (3d Cir.1992) (quoting Monsanto Co. v. Spray–Rite Serv. Corp., 465 U.S. 752, 768, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984) ) (brackets and emphasis omitted). “[I]n this circuit, courts are generally reluctant to use summary judgment dispositions in antitrust actions due to the critical role that intent and motive have in antitrust claims and the difficulty of proving conspiracy by means other than factual inference.” In re Se. Milk Antitrust Litig., 739 F.3d 262, 270 (6th Cir.2014) (internal quotation marks omitted).

Not just any evidence will create a triable issue, however. “[A] conspiracy may be demonstrated by direct or circumstantial evidence.” Re/Max Intern., Inc. v. Realty One, Inc., 173 F.3d 995, 1009 (6th Cir.1999). Cf. Monsanto, 465 U.S. at 768, 104 S.Ct. 1464. Distinctions in Direct Purchasers' evidence of conspiracy are important.

Direct evidence of a conspiracy is evidence that is “tantamount to an acknowledgment of guilt.” In re High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651, 662 (7th Cir.2002). Such evidence will generally preclude summary judgment. See In re Publication Paper Antitrust

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Litig., 690 F.3d 51, 63–64 (2d Cir.2012) (collecting cases). Given the critical role of such evidence, this Court must carefully assess Direct Purchasers' alleged “direct” evidence to ensure it fits the legal description for such evidence: it “must be evidence that is explicit and requires no inferences to establish the proposition or conclusion being asserted.” Hyland, 771 F.3d at 318 (citing In re Baby Food Antitrust Litig., 166 F.3d 112, 118 (3d Cir.1999) ).

“[E]verything else including ambiguous statements” is circumstantial evidence of conspiracy. In re High Fructose Corn Syrup Antitrust Litig., 295 F.3d at 662 (emphasis omitted). “[A]ntitrust law limits the range of permissible inferences from ambiguous evidence in a § 1 case.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). An antitrust plaintiff must “present evidence that tends to exclude the possibility that the alleged conspirators acted independently ... [I]n other words, [an antitrust plaintiff] must show that the inference of conspiracy is reasonable in light of the competing inferences of independent action.” Id. (internal quotation marks omitted). The “tends to exclude” standard “simply represents an explication of th[e] requirement [that inferences of conspiracy drawn from the evidence be “reasonable”]; it does not represent a new hurdle. In other words, evidence creates the requisite reasonable inference of conspiracy if it tends to exclude the possibility that the alleged conspirators acted independently.” Williamson Oil Co. v. Philip Morris, USA, 346 F.3d 1287, 1303 (11th Cir.2003) (internal quotation marks omitted). “[D]eterminations as to the reasonableness of the inferences that c[an] be drawn from the evidence ... [are] threshold legal determinations ... appropriately” made by a district court. Id. at 1304.

Courts “have been cautious in accepting inferences from circumstantial evidence in cases involving allegations of horizontal price-fixing among oligopolists” because the “theory of interdependence” in such markets holds that oligopolists may engage in parallel pricing behavior—even price at supracompetitive levels—without an express or tacit price-fixing agreement. In re Flat Glass Antitrust Litig., 385 F.3d 350, 358–59 (3d Cir.2004) (some internal quotation marks omitted) (collecting cases). Still, as the Sixth Circuit recently explained:

Evidence of “conscious parallelism” ... can support [a price-fixing] claim based upon circumstantial evidence. As the district court put it, “When competitors in a concentrated market establish their prices, not by agreement, but rather in a consciously parallel fashion, this may provide probative evidence of an understanding between competitors to fix prices.” However, that is not necessarily the case: Because of their mutual awareness, oligopolists' decisions may be interdependent although arrived at independently. Thus, the law is settled that proof of consciously parallel business behavior is circumstantial evidence from which an agreement, tacit or express, can be inferred but that such evidence, without more, is insufficient unless the circumstances under which it occurred make the inference of rational, independent choice less attractive than that of concerted action.

This court has set out the following considerations, sometimes referred to as “plus factors,” in determining when circumstantial evidence amounts to a finding of concerted action: 1) whether defendants' actions, if taken independently, would be contrary to their economic interests; 2) product uniformity; 3) whether the defendants have been uniform in their actions; 4) whether the
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defendants have exchanged or have had the opportunity to exchange information relative to the alleged conspiracy; and 5) whether the defendants have a common motive to conspire or have engaged in a large number of communications. However, circumstantial evidence alone cannot support a finding of conspiracy when the evidence is equally consistent with independent conduct.

Hyland, 771 F.3d at 319–20 (internal citations and some quotation marks omitted).

The parties' respective tasks at summary judgment may also be affected by a related feature of antitrust law: “broader inferences are permitted [with respect to circumstantial evidence], and the ‘tends to exclude standard’ is more easily satisfied, when the conspiracy is economically sensible for the alleged conspirators to undertake and ‘the challenged activities could not reasonably be perceived as procompetitive.’ ” In re Publication Paper Antitrust Litig., 690 F.3d at 63 (quoting In re Flat Glass Antitrust Litig., 385 F.3d at 358 ). See also Matsushita Elec., 475 U.S. at 588–92, 106 S.Ct. 1348.

Generally, Direct Purchasers' conspiracy theory is not “economically senseless.” Rather, “[t]he charge is of a garden-variety price-fixing conspiracy.” In re High Fructose Corn Syrup Antitrust Litig., 295 F.3d at 661. It makes “perfect sense” for Defendants to join with other dominant producers of slabstock and underlay to agree on the timing and amount of foam price increases. If successful, the...

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11 practice notes
  • Gov't of Puerto Rico v. Carpenter Co., Civil No. 18-1987 (GAG)
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • February 27, 2020
    ...of fact and expert witness depositions, and extensive motion practice [had] ensued." In re Polyurethane Foam Antitrust Litig., 152 F. Supp. 3d 968, 974 (N.D. Ohio 2015). The same would occur here.Finally, the Court is concerned that the present case could be a needless fishing expedition. S......
  • M.A. v. Wyndham Hotels & Resorts, Inc., Case No. 2:19-CV-849
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • October 7, 2019
    ...a pattern of conduct or could be said to have a tacit agreement. See, e.g. , In re Polyurethane Foam Antitrust Litigation , 152 F. Supp. 3d 968, 983 (N.D. Ohio 2015) (citing In re Baby Food Antitrust Litig. , 166 F.3d 112, 126 (3d Cir. 1999)) (acknowledging that price-fixing can be shown be......
  • Home-Owners Ins. Co. v. Allied Prop. & Cas. Ins. Co., Case No. 1:14–cv–467
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Western District Michigan)
    • January 26, 2016
    ...settled principle that “when a right of indemnification exists, the indemnitor's coverage shall be deemed to be primary” (id. at 21–23).152 F.Supp.3d 968 Having reviewed the policy language, the Court determines that Home–Owners has discharged its burden under Fed. R. Civ. P. 56. See Adicke......
  • Doe v. Lorain-Elyria Motel, Inc., Case No. 2:19-CV-1194
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • March 16, 2020
    ...established a pattern of conduct or could be said to have a tacit agreement. See, e.g., In re Polyurethane Foam Antitrust Litigation, 152 F. Supp. 3d 968, 983 (N.D. Ohio 2015) (citing In re Baby Food Antitrust Litig., 166 F.3d 112, 126 (3d Cir. 1999) (acknowledging that price-fixing can be ......
  • Request a trial to view additional results
11 cases
  • Gov't of Puerto Rico v. Carpenter Co., Civil No. 18-1987 (GAG)
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • February 27, 2020
    ...of fact and expert witness depositions, and extensive motion practice [had] ensued." In re Polyurethane Foam Antitrust Litig., 152 F. Supp. 3d 968, 974 (N.D. Ohio 2015). The same would occur here.Finally, the Court is concerned that the present case could be a needless fishing expedition. S......
  • M.A. v. Wyndham Hotels & Resorts, Inc., Case No. 2:19-CV-849
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • October 7, 2019
    ...a pattern of conduct or could be said to have a tacit agreement. See, e.g. , In re Polyurethane Foam Antitrust Litigation , 152 F. Supp. 3d 968, 983 (N.D. Ohio 2015) (citing In re Baby Food Antitrust Litig. , 166 F.3d 112, 126 (3d Cir. 1999)) (acknowledging that price-fixing can be shown be......
  • Home-Owners Ins. Co. v. Allied Prop. & Cas. Ins. Co., Case No. 1:14–cv–467
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Western District Michigan)
    • January 26, 2016
    ...settled principle that “when a right of indemnification exists, the indemnitor's coverage shall be deemed to be primary” (id. at 21–23).152 F.Supp.3d 968 Having reviewed the policy language, the Court determines that Home–Owners has discharged its burden under Fed. R. Civ. P. 56. See Adicke......
  • Doe v. Lorain-Elyria Motel, Inc., Case No. 2:19-CV-1194
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • March 16, 2020
    ...established a pattern of conduct or could be said to have a tacit agreement. See, e.g., In re Polyurethane Foam Antitrust Litigation, 152 F. Supp. 3d 968, 983 (N.D. Ohio 2015) (citing In re Baby Food Antitrust Litig., 166 F.3d 112, 126 (3d Cir. 1999) (acknowledging that price-fixing can be ......
  • Request a trial to view additional results

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