In re Polyurethane Foam Antitrust Litig.
Decision Date | 09 February 2015 |
Docket Number | Case No. 1:10 MD 2196. |
Citation | 152 F.Supp.3d 968 |
Parties | In re POLYURETHANE FOAM ANTITRUST LITIGATION. This document relates to: Direct Purchaser Class. |
Court | U.S. District Court — Northern District of Ohio |
Michael H. Steinberg, Adam S. Paris, Sullivan & Cromwell, Los Angeles, CA, for Plaintiffs.
JACK ZOUHARY
, District Judge.
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 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.
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)
. 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
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 Id. (internal quotation marks omitted). The “tends to exclude” standard 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:
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 conspiracy would allow each Defendant to enter customer-specific price...
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