Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Supreme Court Will Not Consider Summary Judgment Standard Applied in Paper Price Fixing Case, (Jan 14, 2013)

By Jeffrey May, J.D.

The U.S. Supreme Court has refused to disturb a decision of the U.S. Court of Appeals in New York City that will allow a jury to decide whether a conspiracy to fix prices for publication paper existed and whether that alleged conspiracy caused injury to complaining purchasers. The Court today denied a petition for certiorari filed by publication paper manufacturer Stora Enso North America Corporation (Stora Enso North America v. Parliament Paper, Inc., Dkt. 12-569).

Thus, a class of direct purchasers of the defending manufacturers’ commercial paper products can proceed with their antitrust action. The class action followed a Department of Justice criminal antitrust investigation into Stora Enso. The company was charged by a federal grand jury in 2006 with one count of price fixing related to coated magazine paper. However, the firm was acquitted in July 2007.

In its August 2012 decision (690 F.3d 51, 2012-2 Trade Cases ¶78,000), the Second Circuit determined that a jury could reasonably find that Stora Enso reached an unlawful agreement to raise the price of publication paper, which is used for magazines and catalogs, and that this agreement injured a class of complaining purchasers. The purchasers' case was based on a theory of conscious parallelism. Stora Enso argued that the appellate court improperly vacated summary judgment in its favor, reasoning that (1) because the “totality of the evidence admits of alternative interpretations,” it was the “province of the jury” to weigh the evidence; and (2) a court should “presume” that the plaintiff's injury “was caused by” the alleged antitrust violations.

The petition presented two questions: (1) whether, when circumstantial evidence of a price fixing conspiracy between competitors is ambiguous, such that it permits equally reasonable “alternative interpretations,” one of conspiracy and the other of independent conduct, the Supreme Court's Court’s 1986 decision in Matsushita Electric Industrial Co. v. Zenith Radio Corp. (475 U.S. 574, 1986-1 Trade Cases ¶67,004) requires that summary judgment be granted in favor of the defendant on a Sherman Act, Sec. 1 claim; and (2) whether a plaintiff seeking damages under Sec. 4 of the Clayton Act has the burden at summary judgment of producing evidence demonstrating that the alleged antitrust violation caused a plaintiff’s injury.

Under Matsushita, a Sherman Act, Sec. 1 plaintiff must present evidence “that tends to exclude the possibility that the alleged conspiractors acted independently” in order to defeat a motion for summary judgment. Stora Enso argued that the Second Circuit's decision widens an existing Circuit split over Matsushita's “tends to exclude” summary judgment standard.

David Marx, Jr. (McDermott Will & Emery LLP) for petitioner. Daniel A. Small (Cohen Milstein Sellers & Toll PLLC) for respondents.

News: Antitrust