play court we'll watch your time think you know that that's your complete time yes yes ma'am please the court i'd like to begin with a brief fact summary just a couple points and then move right into the  first this case the claim is about a market allocation agreement whereby united states steel stopped competing on price with u p i for the sale of tamil products the motive for this was clear economic loser was unprofitable so the motive was to make u p i profitable defendants executed their market allocation agreement by having u p i charge a super competitive price to ball wh attempt to compete against and that high u p i price in turn determined the price that u p i charged to silicon which passed on that price to stanislaus to the past you can contract as demonstrated in chart touch as exhibit a the reply brief now citric acid everyone agrees this case governs this case and for the two prongs of that test first defendants fail to satisfy the first acid test and that prong requires that a defendant can rebut conspiracy allegations with plausible and justifiable reasons for conduct consistent with proper business practice defendants have made no effort whatsoever because they cannot to offer any reasons for their conduct they have not presented any reason why u p i increased its price to ball by fifty percent when the ten mil product cost decreased dramatically defendants haven't presented any reason why us still knew that u p i was pricing at a record twenty nine percent margin a ten fold increase yet still priced within two percent nor have they offered any reason why us st applied to this case i guess i'm trying to figure out seems like that was appropriate thing to do and he considered the economic motive it seems like you take issue with that i want to understand why was that incorrect and why was it incorrectly applied if you even if you think it was just go ahead and bear with me and soon that was why was it incorrectly applied by the district so that's what  the supreme court case the government but citric acid is the ninth circuit case which applies shouldn't much sushi to come first so yeah so it seems like in order to even get into citric acid you first have to have a notion that there was a conspiracy and matsushita to me seems to bear on that first question to even have a presumption of the conspiracy in the first place and i'm struggling with how you even get to citric acid because it seems like the district court thought you failed to even create the presumption of a conspiracy here so  just a court erred in several areas first of all it erred by compartmentalizing the evidence in violation of continental or second erred by ignoring the dictates of vacuum and american tobacco company by trying to piece  conspiracy into a neat and tidy box those cases hold the conspiracies of volved there's no set formula for a conspiracy now it's the economic motive we did allege and put in the record the economic motive of u s steel and all the defendants to make u p i profitable as well so what do you say with that so what i mean isn't that actually sort of the foundation of american commerce to make your company profitable exactly so so what's i mean so that's what they are trying to do so i don't understand why that because you're why else why it's in their interest because you are not you know he was not in there go ahead just go ahead argue go ahead  steel is not i don't want to listen to the i'm sorry and understand no i mean we're trying to undergird trying to get to the bottom of that and you want to make your argument but one of the things that isn't accounted for in here it seems to me in  it's not a price fixing case correct at this range ok so to the extent that you're talking about pricing conspiracy as opposed to market allocation how do you distinguish between those two i don't have to american tobacco says you do not have to distinguish and put it label on anti competitive conduct we don't have to put a label on it but what's it there's a difference between a price conspiracy and a market allocation conspiracy in terms of the underlying facts and you don't have to put a label on it but it could it could fall under the sherman act price fixing that you say but that's not what we have here we have the evidence of a market allocation the evidence is us steel not pricing to compete with u p i the best example is the pricing to ball and if you look at exhibit b to the reply brief the chart that shows with the declining  input cost of similar products and all the other market in just at that time there is no rational explanation for a no economic explanation for ball to be price for u p i to increase its prices to ball by fifty percent and us still to essentially match that price to have it within two percent and that price of course triggered the price into silver so in terms of your own it i mean is your question of the national conference so when examine the implication  contract i think there are two key issues that apply first national contracts do not explain matching prices to fall and u s steel secondly had the economic motive to match  price to ball so you can't look at these contracts in a vacuum because everything like to ask a question about the vote of first second so i think your argument is that u s steel was going to be better off economically by not competing and getting fifty percent instead of competing offering a slightly lower price than maybe getting all the business of getting one hundred percent is there any and now also in the record that shows that they're actually better off with the fifty percent than one hundred percent that they might get by competing away that a mathematical analysis of the profit  i don't have what we need the comparison right and what they would have made otherwise is that exist anywhere no but you can definitely understand that you with us still pricing in such a way to ball because as you you recognise still is it profit making company every decision it made was to to be profitable to in order to benefit so that shareholders so if it was giving up market share to ball view in the west was making up that profit somewhere else and so it must have made it rational as well but they might not have been trying to give value to the sales so i mean maybe they were doing the best they could to offer a lower price and they were hoping they'd get this business and they failed but two percent price difference is going to get you the business with these kinds of contracts and i mean this is their record as well  just record on a path to show that that price that you were still made was lower and therefore it was competitive but if it's only two percent a two percent price difference is going to change a customer pricing decision but we consider there is a twenty contract or something out the ball business is generally right but so under the national contract how much ball business was even available to compete for it because it seemed to me looking at these contracts that a huge amount of business was already locked in by these national contracts and if that's the case it's not even clear to me how much business was left market in the western united states is substantial hundreds of millions of dollars a year but that's where the national contracts they are shipping to the western united states they use and that's also when i think you were about to maybe explain your position on that because it that's it seems to me one of the difficulties in your case is you have national contracts which don't specify the west but of course once the orders are placed a number of them are going to the west so how do you distinguish that from the so called western market so ball crown and so that when they make cans for their can customers such a status as they make them in camp california because you don't ship cans it's economically inefficient it's like shipping air it's too expensive to do so they want to have their template in california delivered here so they can make  their their cans here which is why they all sourced from u p i here you don't have to pay extra shipping but what about the evidence in fact there were there were were cans going under the national contracts after the ball contracts rendered down to four percent so it belies the argument that the national contracts in some way are a defense considering the de minimus market share that u s steel had here now a answer your question about that national contracts the lower court raised the issue of them in the context of determining the plausibility of stanislaus this claim by look into whether u s steel had economic motive for the alleged agreement the error in the court speculation about whether u s steel had economic motive the record shows that the us to profit from the agreement exceeded one hundred million dollars in two thousand and nine eleven and  as to the court speculation as to how the risk of loss of business to other competitors and u p i would stack up against the u s still gain from its half share of those record profits for instance if u s steel had little ball t m p business nothing defendants have put in the record it's risk of lost business from the agreement would be no but have all had long term t m p contracts with u s steals competitors that business is already locked up so u s steel had no risk of losing the business because there  are other long term contracts it made when it made its contract with ball in two thousand and eight two thousand and nine it knew the status of the ball business it could have priced to get it and it chose not to and would only what would be the price i'm in other words we're if there's a couple percent price differential and you say it's not enough so where do we look to determine where what would be enough on the sliding scale of of how you determine price and then let me just add another quick part of that question is is it fair enough to look retrospectively at that as opposed to what was happening at the time it is because us steel and still going to get the fair price for ten mil products was the price of hoppin steel plus a three hundred fifty dollars after and then if you look at the chart chart three it touches exhibit b to the required review you can see the historical spread in the historical prices that you and you still charge and then the crazy inversion that happens when the price of hoppin steel which makes up seventy percent of the price of tinplate cratered during the start of the recession there is no economically justifiable reason for us steel and u p i to raise their prices by fifty percent that can only be an of a conspiracy i want to add of course that the inferences have to go to the plaintiff here in opposing summary judgment and that the district court was wrong to compartmentalise the evidence it only looked at some of the evidence and under continental or it's required to look at all the evidence together it can't just leave it as a challenge that we have on appeal and that is you know the courts always say they look at everything of course but in order to actually try to understand the transactions in almost every any trust case i've seen and certainly the ones that i tried you have to compartmentalize the evidence to where it's not compartmentalise you have to put out aspects of the evidence in order to understand what's happening so what evidence is there here that the district court  at everything by highlighted some things so first this court has a dyno standard here so it's theirs it's not bound by the district towards summaries of its evidence but the evidence is replete the industry conditions at the time  offered no reason why then in the time of declining demand commodity products low import prices that they should've increased prices that's together the industry standards and dr rouser talks about this about how the market was indicative and right well it was improper for the defense to price in the way base and proper economic theory and in terms of the other evidence the direct communications between u p i s management the entire record in this case is sealed we just had an open argument here and that's pretty unusual you know even in the national security case we get piecemeal sealing we don't usually seal the whole record  what's the reason that everything is sealed here both in the briefs and the record that well there are two reasons one is it was really the price information that was business confidential  opinion that it followed a path that is mapped out in the case law in both mets ishita and citric acid and looking at whether or not the record supplied first an inference of conspiracy and then whether there were plus factors in the evidence to substantiate that having done that it looked at the evidence individually and then collectively exactly as the case law instructs and it ended up here frankly with the only viable conclusion from the record which is there's no reasonable inference that can be drawn from any of this evidence of a market allocation conspiracy on the west coast that actually influenced the price of the sylvan u p i contract which is where this all ends up now let's spend a little time on that contract for a minute and how it came  to be that wasn't part of the analysis in the opening argument but it's very revealing for why there is in fact no inference of conspiracy possible here the reason that the sylvan u p i contract was entered into and the reason the price was arrived at had nothing to do with market allocation of any kind it had to do with silicon own investigation of the market and its decision that the price in the u p i agreement was the one that it wanted for long term stability it was an arm's length agreement negotiated for more than a year no one knew this market better than sil silicon bought a billion dollars worth of tinplate a year it bought it all over the world and it drove the prices in the bargains that it struck because of that market power why specifically did the prices increase in two thousand and eight prices were increasing all over the market in two thousand and eight and two thousand and nine and it's ticking up with the thread of silicon for a minute that's what it market its market analysis revealed silicon shot to its contract all over the world to european suppliers to asian suppliers to national suppliers and it said and it's witness's testimony was on contradicted prices were rising and increasing rapidly raw material costs were increasing industry prices were going up across the board silicon in fact in an effort to deal with that volatile change in the market price a got out ahead of it started the discussions with u p i entered the new agreement for a price that ended up to be the second lowest in the market second only to u s steel which was the lowest and of course silicon had the capacity to buy more from u s steel at a lower about the testimony about the theory agreement or the fair spread so i speak and you also had a situation where the spread between the hot b m prices and these milk products or it was you know there was an historical graph so to speak and then all the sudden you're off the charts if you will you know so those those seem to be at odds with what you're explaining now could you just justify or talk about that certainly first of all your honor i want to caution the court that all of that story is attorney argument drawn from abstract data it's not based on foundational facts from the players in the drama and so it's not a way to sustain an inference of conspiracy because as we know the mere fact that prices are increasing is neutral but let's unpack it for a minute first of all there was no agreement in the record or otherwise on a fair price formula of a relationship between the cost of hot band steel and simply in fact if you look at the record we are six thirty two to six thirty seven this is the best indication of it it's an exchange between mr coffee of u s steel and mr arena of silicon over that very issue and kopf advises mr arena what the market price is actually are he disagrees that they're linked to hot band steel  and there was no formula now there also couldn't have been a formula like that in this case anyway as it related to u s steel because u s steel's prices never changed to silicon they were the same before they were the same after they were such by contract and they had nothing to do with hot band steel now the other thing about this fair price argument about a national contract is yes exactly the ten year contract that predated it went right now let's go to this fair price an oreo for a second because it's not actually capable of being substantiated either the idea of this fair price was according to the plaintiff's us steel was supposed to slide into the market at lower prices and compete for greater market share well it couldn't do that the national contracts that it had didn't allow it to dictate where its product would go and those contracts set the price that it could charge this was not the typical competitive situation second on that point i think the argument was made however that if you look at the practicality of shipping and production that that belies the statement that the national contract them no really are national in scope actually your honor there's no foundation for the observation that's more attorney argument and the fact of the matter is in silicon said this the they traded the product all over the nation all the time they moved it from east to west west to east where they wanted it at their direction mr arena was clear that's the way they did it the rest of the market evidence is that the product did move nationally u s steel only had forty percent of the entire market so in addition not only did the product move it wasn't coming only from the conspirators here they had no ability to control this market thirty percent of it was foreign so the idea that they could even allocate is it beside the point that coming back to this fair price argument for a minute not only could competitive difference here so if there were market forces out there that were changing the prices u s steel was priced in a way to take advantage of that and there's no evidence in the record that those low prices were somehow artificial or otherwise but let's take that all and say that those prices were artificially high or anything else there's no testimony to substantiate that but let me just take it one step further and let's put in the notion that s steel prices were unfair and unfairly high that's not an antitrust issues the question is were those prices what the market would bear and the answer to that is yes they were as competitive as anybody's they were as low as anybody's there is no antitrust violation from putting the highest price in the market that you possibly can the s supreme court has told us that and the babyfood third circuit case tells us that when you can't do it is when you have an unlawful agreement but that's the evidence ok sanderson let's go to the  wouldn't be taking it in the light most favorable to them and sufficient evidence ok so first of all your honor there's no evidence to substantiate the litany that's in the brief about the exchange about the motives and about the intent please unpack the evidence that cited for that and you'll see two things first you'll see that there was an exchange of price information amongst the joint ventures in the principles but that is record neutral that's what i'm sorry it's record neutral and i trust neutral i'm sorry the the joint ventures clearly all had an interest in u p i being profitable it was losing money on every contract that it had and the notion that there would be some discussion about raising prices was not only not surprising it was essential to u p i s survival now then if we look at what information was actually exchanged and who controlled the pricing we don't find evidence that us steel instructed or controlled the prices that u p i charged the record entity quote setting the price and communications between entities as to what that price might be well that's true your honor but but taking both those things again from an antitrust perspective even if competitors exchange price information that's antitrust neutral so you need you have to do something with it have you have that i say yes there has to be an unlawful element to it and that's the second part of the record that's missing here they  have no evidence that says that u s steel's prices changed in any respect because of this information and the only evidence that they cite two are the two spot transactions which clearly are distinguishable here and clearly were one off transactions where the u s that deal i'm sorry because they point to the polls have come forward with sounds like highly suspicious documents or sounding like highly suspicious documents references to greed and what u s steel is doing an undue attention to a small supply order to crile why don't these documents support a reasonable inference of well let me go for two reasons first none of those documents are related to the national contracts that are actually supplying the market and u s steel i have a question about that so in the u p i still going contract had a guarantee of the lowest price right so if you could a spot sale trigger the lowest price guarantee or is it only the the long term contract the trigger right the regular contract but the spot is that sorry is that in the records i tried to read the contract or that out and i had trouble figuring that out no i don't i don't know that there is some i'm not aware that there is direct testimony that supports that in the record but your understanding is the spot sale couldn't even trigger the low price  but but assuming that that spot price is higher and it's evident that u s steel raised its prices in that instance there's a perfectly rational explanation for it first it was a one off transaction where u s steel could command a higher price and u s steel's national price for its regular sales to crown bowl and u p i was was lower than the spot price the second thing was that u s steel was able to charge that price because u p i had refused the business and didn't want it and so u s steel did what any competitor would do it stated a price to crown crown said ok and it sold it a one off deal why did it get the c e o s attention this deal if it was such a tiny deal and so one off why why did it get to such a high level you know i don't know that anybody  provided a motive or indication for that there was a sensitivity in us feel about the prices that you could get in the market and the u steel executive was wondering how can we price at this high and this was this was the colloquy it with u p i either why are they getting this how in the world do we get this it was a good thing and then the explanation was u p i had refused the business and he said ok i get it it's a one off which is exactly what it was testimony it's not supply you it's a price yes it was it was  in the spot market the record is clear that you can command prices that are average to the market and usually higher because the person whose needs the product is is pressed their regular supplier isn't giving it to him or transaction which was what more do you need for a reasonable inference of well i would point the court to the cases that plaintiff cites favorably as supporting a conspiracy and i would distinguish those from baby food and say citric acid a c v apple on the other side look at that is the spectrum if you look at the cases that plaintiff relies on you're going to see memos you're going to d c discussions about stabilizing you're going to see direct participants in the purported conspiracy exchanging the kind of information that substantiates and inference in this record your honor and i caution the court when i first stood up on this that evidence is supplied by trying argument it is not supplied by the kinds of memos retaliation conduct against economic  motive direct discussions by participants about stabilizing prices none of that is being exchanged between these defendants with reference to a market allocation conspiracy forget about the prices for a second a market allocation conspiracy play understand their argument of course to be that you know you have no way to categorize things and that pricing can be and issue rocket allocation so i'm reading though as i understand what the claim is here that u s did not seek or get business in the western u s that's allocating the t m b market to u p i and you agree that that actually is the narrow issue that was left after many things by the wayside i would we don't agree that it's a western market it's in fact a national market but let's look at let's narrow down to that let me can see i know you don't agree that in the western market but that's that is their claim let me six it was shipping more than than before i mean during the conspiring went down then in two thousand and eight or nine right it went up and then down right it did but it was still more that's the point us steel never refused to ship to the west coast when anybody asked us steel never refused an order there was no one who said that they ever said oh get it to u p i nothing like that u s steel complied with its contract ship it wanted more business michael arena of silk and said every year that i held my job u s steel wanted to sell me more ten point they didn't like the price u s steel was too low but they wanted to sell more and and arenas said no you're not reliable and i want diverse sources of supply to protect my business and of analysis but the idea that u s steel was not competing during this period of conspiracy is refuted directly by the record it didn't exit the market and it stayed in it i want to do one minute on the crown ball price cut so much play interestingly you'll find that crown and ball are in the third amended complaint only three times or twice none with respect to price none with respect to their contracts this is an invention of appeal there is no evidence to substantiate  relationship between the contract the ball had with u p i the ball had with us steel that ball had ordered that those by virtue of the most favored nation clause had any effect on the price that  also antitrust neutral it's a perfectly reasonable contract provision you will search the record invain your honour's for any evidence that connects that clause to any price in any contract that leverage still drove the price to silicon drove the price in the market at all what you will find is that the market forces allowed those prices to be charged us steel charged them there is nothing wrong with that is prices still were the lowest in the market across the board so it was competing on price you can't make a conspiracy out of that thank you thank you it sounds to me your honour's that there's enough factual disputes that this requires to go to a jury that's what i just heard do you have evidence in the record that says that the crown spot market sale could have triggered the most favored nation cla no but that spot but looking at that piece of evidence with all the other evidence because the inference has to go to the plaintiffs there's no reason for us steel to charge an astronomical price to crown then when the  o of u s steel was concerned that u p i was full and want to know why it was getting that business that inference if you got your deposition i mean it seems like your major theory right now is that this spot market sell it is the evidence of the conspiracy but you never asked anyone  deposition whether it actually mattered the fact price that sale was about one hundredth of u s steel's national t m p sales that year and what we asked was why it was gathering the attention of  business they don't understand why crown was coming to them and then and so why isn't that a totally neutral fine explanation because you don't look at it in isolation you have to look at it in conjunction with all the others all the other evidence what do they want you know isn't a spot  market sale in and of itself isn't your regular sale to some degree when you have national long term contracts right yes so the fact that the pricing ends up where it is in and of itself doesn't make any any trust violation of market allocation does it but there's nothing in the record that you refuse that business that was an error i believe council made didn't say anything for his proposition and it was consistent with the defendants here where they never offer a justification for their conduct and it's a characterization of that evidence and so the weight of that evidence going to the plaintiff's i think it's also important to note that the prices were not increasing in late two thousand and eight yes they had been increasing earlier but once the recession hit the prices for template and hoppin steel were increasing dramatically and the that type of precision when when your pricing may actually be accounting for what's happening in the market over a period so is there somewhere we should look to support your argument that just because the prices weren't increasing that there should have been a different price  that the market conditions exhaustedly and just a point about that i know the district court was upset with dr oz and yes we could have had better page dozen nations but we did point to the summary which is right off the table contents it was not it was not just dumped into the record for the district court to find on its own i understand but it there is you know you point to the table contents and then that reza has quite a bit as i read through it if you look at each of the sections he has a lot of in every section about a lot of things so right you can understand why the district court or the district or to characterize an opinion is unsubstantiated just isn't correct it was a substantial opinion and i spent a course where as you appropriately acknowledge we're prong test to justify their conduct there is an overwhelming amount of evidence if you look in a reply brief from pages twenty one to twenty four it is replete with bullet points that it lists out all the evidence something happened here it could only be an  conspiracy it could only be us steel agreeing with u p i not to price compete in the west and those high prices directly impacted my clients stance loss this isn't by the way some penny any case this is tens of millions  losses the largest fresh pack tomato canner in the valley it is a huge business and it buys tens of millions of cans a year so this isn't some isolated isolated compound business dispute  it is a serious matter the conspiracy evidence here is not and i trust neutral that again is attorney conjecture and it's not the appropriate inference that continental or and just a general jurisprudence about summary judgment a