all right our second case for this morning is clean products against georgia pacific and west rock  morning chief judge would make please the court the district court disregarded evidence that would have allowed a jury to conclude the defendant's coronated price increases were the result of the unlawful express agreement and it did so because it wrongly concluded that this evidence was to nine and it's e mails that are sent by temple in london january of two thousand and ten and there's a discussion about whether they ought to try to get business from a specific customer i think it was called  ion but i may have that wrong but what the e mail says is you need to coax the customer as to what to tell international paper because i know there's a price increase that we're trying to put through and we want to make sure that international paper doesn't think that we're messing this up now that's an extraordinary email there is no siebel reason for temple and learn to be either reluctant to take the business from its competitor or to be worried about what the customer will say to the competitor unless there is a sense of obligation that temple in one fell towards international paper that and the possibility that that international paper would retaliate against point to anything where somebody was in fact punished you know maybe an internal sale didn't happen or maybe there was some other actual event well  i don't think that i can point to anything that is reflected within the record where there was a discussion about here's how we got back at a particular as always so didn't go along with our price increase and so  targeted let's say an area of the country where they were doing business or in some other fashion and i have something specifically like that what i do have in addition to what i've pointed to is another e mail that international paper sends in february of two thousand and seven and appears in the appendix a day three o three and there is international paper loses some business as a result of a price increase and it says too there's a email from a superior  why they got that business  i'm sorry to interrupt you but i honestly need help with this because for each of the behaviors that the plane  have pointed to as evidence of collusion it seemed to me that there was an alternative and equally likely explanation that that didn't involve price fixing but rather just ordinary market forces so it would be helpful for me if you know your responses you could sort of use that as outlined certainly and i i do think first of all let me make one legal point which is as this core pointed out in the high fructose corn syrup case it is not the characteristic of the circumstantial evidence that will support a finding of conspiracy in a case like this that there is only one appropriate interpretation of it as as i'm that opinion says there are different interpretations for every single piece of evidence that was offered the nevertheless it's the jury's role where a particular interpretation would tend to exclude the non conspiratorial explanation for conduct it's the jury's role to make the decision about how best to interpret that evidence and so for that point yeah i mean obviously as we all know the summary judgment standard requires all inferences to be taken in favor of the opponent that would be in your favor in this case and then to ask you know does the evidence so to get across the fifty yard line you know are you somehow now in a position where if a jury buys the packet of evidence with the inferences that you think are legitimate do we have something that shows collusion not something that shows self interested oligopolies to behavior i think that's exactly right and and the cut and again the two to bring out some of the other evidence that we've cited in reef obviously tried to cite a number of categories of evidence in our about how management has decided that there's going to be a price increase and it's a very it's very interesting we boarded and again a place jury could look at that find it highly suspicious because what he says is you know it's hard to know when we want to raise prices and management has decided now's the time and and what if what he says which again is very curious he says the industry has done a good job of reducing capacity and the industry needs this additional money because otherwise we can't the quantity dimension of things there are really two different strategies that go along one of them is just abolishing capacity that's a very costly strategy very hard to come right back  but the other is just the down time in the slow down time where it leaves simba gillett e for the manufacturers so you can put up a trial balloon see if other people follow your price increase if they do great everybody's happy there's a higher price if they don't you just speak the line back up again or you bring it back on again and it's like i think it's like airlines you know if american airlines wants to raise the prices on the chicago to new york route by hundred dollars they know it's a hundred dollar increase and if united southwest etc don't really want to do that then america just pops back down to where it was but there's something more going on your honor because what happens here is and  can look at georgia pacific e mails one of the one of the points i wanted to get to i was talking about in georgia pacific increased capacity right over the course of this but what they did do was to slow down production at times when it was designed to support a price increase  and i do want to focus why wouldn't they do that in their own interest why wouldn't they be perfectly happy to see a market wide price increase well because when they they announce the price increase and that may be fall but what they are doing is something a little bit different which is the e they are artificially restricting or at least the jury could still find their artificially restricting the amount of inventory they have available but you know way that they can turn it around tomorrow you know very quickly but they are but their sales people are worried that they're going to lose sales and the only the most at least the jury could find that the reason they have the confidence to do that the reason that mr fisher was willing to order people keep your inventories low keep production slow notwithstanding the demand that you see is that it knew despite the fact that it was a ten percent player it knew that its rivals were similarly going to hold firm to the price increase and that's what i wanted my do and i'm out there many many reasons why you know the defendants might have acted unilaterally to reduce supply you have recession's you have so attempts to crease the price the profit you have the desire to match the demand the supply there are other rational market forces and what judge would know did i which is really the i think there's their first well there's a dispute about what george pacific did with respect to its production and there was an expert testimony going to focus on what that dispute is then certainly there's so there's a there's a question as to georgia pacific claim that when it flowed back production or reduce or took down time that it was doing that purely for maintenance reasons there was testimony by are you contesting that over the class period georgia pacific actually increased capacity i  i don't believe are contesting that i think those numbers are i think it's never disputed yes so there may be blips along the way but the line is up right but the focus of this the the focus of the conspiracy is on on concerted price increases and i do want to try to try to come back one more time to that early two thousand and four period in this pca memo and what's going on in georgia pacific because the simultaneity of those documents is also very significant remember that at this time the georgia pacific executive is telling its is getting complaints from its sales people that are saying we're not getting enough we're not getting enough supply into our box plants that we can supply our customers were losing worse and  profit per sale happens we have profit data i don't i don't believe that we've seen evidence of what the but remember these are price these are price takers and so the question is whether are they and they're not explicitly price takers well they none of them have the power and this is why i think it's significant that what georgia pacific is doing ga is that it's a ten percent player or eleven percent player in the market they do not have enough they don't have an ability by themselves to cause to write them right i so that's clearly right and so as a result when they say we're going to give up sales we're going to pull pull down inventory to create to create scarcity that our customers  see that's a strange thing to do unless they have confidence that other other producers are going to be doing the same thing and we see my dad i think there are two branches of that they're going to do it if they have confidence that others will follow and if the interstate circuit toys  us story or they'll do it if they say we're just sticking our big toe in the water will wait a couple weeks see what happens but we can quickly recover again right but how do but again the i mean the defendants make you can make some of these arguments no question about it but if you look on the plaintiff side you say wait a minute why is p c a telling its sales people in march do not we're going to get three price increases in the next in the next eighteen months we there's the only price increase that is otherwise reflected in the record was from march which march of two thousand and three which failed and so we see a completely different outcome from this one  and you know i focused on this but there are additional emails that a jury could look at and say reflect a sense of for example a sense of felt obligation on the part of the defendants to follow a price increase their  he wrong if i was led to believe that at least forty percent of the attempted price increases they are in and many of the class period once the pattern was very well established they may have felt like they could take advantage of it but the key point is that that itself shows that the defendants were attempting to push through price increases when market conditions did not barnett sometimes they succeed and sometimes they did not but i think that the that is electively you've argued they have market power it's very much like the european union share dominance theory that we don't happen to have it the for sure they have collectively they have market power  and again the question is i take it that there's really no excuse the question is do we have enough evidence here of the sort of traditional conspiratorial kind to us your as your honor said push it across the fifty yard line such that a defendant to the jury could look at that and say that that coincidence too coincidence is too much for me except or that statement doesn't seem to me to be consistent with unilateral smurfit for instance dissipate in a conspiracy when it was under the oversight of the federal bankruptcy court the u c c creditors increase that was announced in june as in late june of two thousand and ten they are coming out of bankruptcy and their announcement was made on july first when they were had been discharged from bankruptcy and that's the basis for their liability but furthermore a jury could plan that they had made and that indeed and there's evidence to back that up there's a there's a statement in an internal smurfit presentation that says by closing these plants we will communicate to  audiences that we are doing a good job of supporting supporting these price increases your honor so i see that i only have about good morning your honors may please the court my name is kate stetson i'm representing the appellee georgia pacific and i'm splitting my time with ms as judge want to start with one of your first questions which had to do with whether the conduct that's being challenged here is alternatively and equally likely explained by ordinary market forces and i think that is exactly the point that what the plaintiffs are challenging here the conduct they are challenging is ordinary conduct that the plaintiffs are repeatedly labeling remarkable when in fact there's nothing remarkable about it because i have it's only ordinary market would somebody know that in the coming eighteen months or so whatever it was they're going to be three fifty dollar price increases people don't know that without some kind of prearrangement you know and i but i don't think that that particular piece of evidence suggests that industry knowledge it's an industry prediction that the market supports that it one of the problems with let me just push back on that a little bit i would say looking at this record that it's certainly one on which a rational jury could find in favor of your clients but that's not quite the question the question is is it so clear based on the undisputed facts in the in the reasonable inferences that no jury could find for your opponents that we take this away from the jury and there are there's a lot that's shady about about all of this whether it's planned price increases whether it's signals coordinating actions what i w so judge would just to take a question and two parts first on the standard and i want to make clear what the standard is because i think it's not something that you see repeated very often in the plaintiff's rethink the standard in this court the standard that the supreme court in equitable ways summary judgment is granted for the defendant so that's the standard right and that's why i said past the fifty yard line however you want whatever metaphor you want you know evidence doesn't come a little packages that we can just stack up unfortunately and so when you have the evidence that suggests that these dominant companies are sitting down and saying look we need a price point the market let's act together wink wink and get the price to go up by two hundred dollars a ton and that's that's a problem if they're all just playing footsie with each other they're all just watching what what's happening and making adjustments in quantity and seeing which price increases stick and which ones don't then there's a gap in the any trust laws it doesn't cover that that's correct and that is what happened here the well i know that's going to say how the way that the for you formulated your question was all the defendants sit down and talk about putting together a price increase what's remarkable about this case is after six years of discovery millions of pages of documents dozens of depositions what the plaintiffs haven't pointed and talked about surely you would agree that it's possible to to prove a case by circumstantial evidence if to the extent the defendants are arguing that only direct evidence will do the law does not support no that's not are and i will say this is a very experienced industry when it comes to any trust and so wouldn't surprise me if well counseled clients knew that you didn't put stuff like that down in the minutes that the fact that it's an experienced industry is an communicate in advance about price changes but those price changes obviously become public at some point and others can follow  opinion is that there weren't facts apply reductions around the times of crisis increases which is exactly what you would expect in a functioning market that looks like this and georgia pacific in particular i want to be very clear that the idea that georgia pacific somehow participated in a conspiracy to reduce capacity is completely belied by the fact the judge would i think you mentioned georgia pacific creased its capacity by eleven percent during this class period so the notion that there was a conspiracy involving georgia pacific which you didn't hear very much from mr panner to reduce capacity is completely belied by the record the other point that mr panter made with respect to georgia pacific had to do with inventory but of course inventory is different the capacity inventory is the stuff that you have that you haven't yet sold and georgia pacific as we explained in our brief from one thousand nine hundred ninety nine well before this class period had a run to demand strategy where they would produce what their customers required they never missed supply and it was very fashionable from the one nine hundred eighty s forward after the japanese had their just in time systems yes and perhaps that's why georgia pacific introduced it but the important thing is that that strategy and it was something that even plaintiffs expert conceded was an appropriate and sound thing to do market wise now i want to make a point you each asked a question judge rover and judge wood on and for cement and i do think that this is worth bringing home because in the in the very few cases where this court has reversed a summary judgment so i'm talking about high fru and petroleum in particular you had mechanisms there that were readily evident that punished people who didn't get with the program and judge would i think you asked was someone in fact punished on this record the answer is no you can see that from the fact that six of these fifteen price increases failed and everyone knew who was responsible for it if you look at the joint appendix cites in our brief to exactly this proposition what what the plaintiffs call the cheaters were very evident on the face of the record and yet there was no punishment mechanism in fact plaintiff's own expert at joint appendix five thirty four conceded that there wasn't ineffective let's say enforcement mechanism it really depends on how closely you get the cartel is and whether everyone is willing to give a little bit of a pass to people and even think of opec i mean there's only so much that one sovereign nation can do to another sovereign nation if somebody throws a few more barrels of oil into the market that's true but but i think what's what's unusual about this case compared to as i said the other cases where the unfortunate mechanism was was not just present but utilized is that mr pander conceded to you as he had to that no one there's no evidence that anyone was punished there is in fact precious little evidence that there was even a capacity for to punish there's a reference i think in the plain just briefed to the idea that georgia pacific by slowing back because of course remember georgia pacific didn't shut down anything and ran at one hundred percent capacity for most of the months of this but georgia pacific by slowing that some portion of its capacity could potentially punish so did georgia help me for this it was my impression that georgia pacific i think you just said it but i want to narrow it down did not engage in the what i'm calling kind of permanent capacity reductions just selling a play or destroying it you know pulverizing and whatever that they just did these more versatile changes they did and that that what that's exactly the point that i think is a distinguishing characteristic between the conduct that you might expect from a member of cartel and the conduct that you would expect from a member of a functioning all look up a list to market your point earlier had to do with this this notion of perilous leading shut a mill you are taking a huge leap that people follow you if you slow bad or you're not going to if there's a cartel if you're not if there's a cartel but to georgia pacific's specific circumstances if you slow back as you said there's a chance to pick up an onslow back i would also note with respect to georgia pacific georgia pacific took no economic slow backward down time for forty of the forty seven months of this so called conspiracy so whatever mechanism was there was something that was simply unavailable to congress even if the idea of punishment had been floated there was no punishment in the instances in which one company was the the leader i want to look at the failed instances the six times it didn't happen and the company that was the leader realizes well this is just not going to stick do we have evidence of quantity increasing at that point or do we have evidence what does the market evidence show when when the when the price slips back again to where it was before that i assume is the definition of a failed effort i don't think there is evidence of quantity increasing after that and of course in addition to the failed price of thirds what what is evident from the class period that we're talking about there were huge plummets in the price during the great recession of course in two thousand and eight in two thousand and nine the price to my recollection dropped one hundred dollars in the span of just several months so right they're going to recover i mean overall though the full period it's theirs is very significant increase over over a long period of time yes but what's missing from m presentation both in his briefing today is the evidence of an agreement an agreement to fix prices everything that you have heard and everything that we have discussed is ordinary market conduct expected from market participants in a small concentrated industry so you think the only evidence of an agreement would be an informant or i mean obviously there's plenty of opportunity to agree these people talk to each other day and night they're meeting constantly and so you know if i were advising cartel i would say just make sure you're practically in bed with everyone else you know just you know don't ever leave them and that way you can say oh we were talking all the time so there are no inferences possible so it seems a little offbeat to associates ations in the mix each of them with subcommittees climate change government regulation and so forth so that's not surprising the phone calls are equally not surprising because this is a small market the trades with each week with each other constantly what is surprising is that what plaintiffs can show you with all of those meetings and all of those phone calls is one instance where someone in a deposition or in a document says here is what we agreed in that meeting that we're going to do to fix prices that is the difference in response to your question about what would count what would count as the statements and high fructose we have an understanding in the industry we don't undercut each other's prices what would count as j t petroleum where there was evidence of significant pretextual reason why one non joiner was punished for not going along with the crowd or an informant all of those things are possible all of those things have been found to warrant summary judgment reversal this court has how could we possibly participate a conspiracy like this under the extraordinary supervision of the bankruptcy court by going to the post discharge periods undisputed we committed bankruptcy in june of twenty ten four months before the class period ended everyone agrees we are out of this case we don't go to a jury if our unless the plaintiffs can show summary judgment evidence of an end to trust violation in that post discharge period so i mean i modify what you said just a tiny bit i think what needs to be shown is evidence that after or your client comes out of bankruptcy it rejoins the conspiracy if it rejoins the conspiracy and ratifies all of the things that have gone on during it absence the potential for liability is much greater if it didn't rejoin the conspiracy it had it's just charge and bankruptcy it can't be held liable for anything that happened up till that time so i think that's what we need to focus on i will focus on that your honor with a footnote that because we have to have the interest violation in this is not a government case injury is an element you need proof of that to go to a jury otherwise there's no point they can't prove what they need to prove in the clinic but let me start with the question is there evidence in the post discharge period that our client joined this conspiracy or joined or read which ever we can which ever it would you have to show that we manifest that agreement that we did something that was conspiratorial or not sign up with these folks yes three points i'd like to cover the first is in the post start discharge period they don't even get to the fifty yard line but even if they do they don't have enough to take it over why let's look at the record it is undisputed at this stage we have to look at the whole record it is undisputed on capacity this a page eleven of our brief we were up thirty five percent post discharge over two thousand and five undisputed it's also undisputed we did not raise our prices in that period the price and it is also undisputed that we won sixty eight million dollars in share by price competing with other manufacturers in the post this church period it is also undisputed that when we announced our increase it was validated and verified by an unprecedented and extraordinary number of third parties this judge rover indicated that is all undisputed the court must consider that evidence is judge over pointed out of independent plaintiffs have to counter it they have the price announcement that number one failed number two was led by a non defendant number three was announced by our client after months of  evidence of what led up to the price increase there's all of this studying that was going on no indications because somebody was at a trade association meeting or at in any other way communicating with or communicating with the other companies so here we have the pile of undisputed evidence i mentioned thirty five percent up on capacity no price increase we won sixty eight million and share that all looks very competitive at least and a minimum all we got ballistic to me one of the counter with a failed price announcement led by no one defendant it's in our case supported by independent analysis and i would add on top of it all after a long period where unlike high fructose unlike toys r us we were doing all of these assessments and pursuing these increases because we were hurting on cost and i think this is critical when you study you are a company that shut down a lot of supposedly very inefficient capacity that you bought that one big nail and shut down some other things and i'm so glad you asked about that because that's the point it's not whether you shut down mill it's whether you're taking production out of the system now you can do that by the way that's perfectly lawful so that isn't even evidence of anything but let's stop let's let's go all the way with the pla fifty yard line but they say no you have to look back to the intent for the color ok what do we see i'm so glad you asked this because the thirty five percent figure on page eleven of our brief that's after discharge over two thousand and five now for the cuts what do we see first of all on like text messaging or toys r us there is no abrupt shift right when you look at the pretty classic period one thousand nine hundred ninety eight two thousand and two our client was already shutting mills why we had a merger we were inefficient we weren't doing it to take capacity out in fact what you see undisputed is our capacity goes up right and we need price increases to recover costs this is true period there's no shift now we're in the class period right oh three we have this strategic plan we've got to cut we bought the stevenson mill it allowed us to meet all of our customer demand more efficiently so what did we do we shut them up you know the less the fish and mills the judge wrote first question great another demonstrate your modus operandi it really helped him indeed exactly and let me continue to say why because over three we do the rationality plan we cut oh five or strategic reassessment we continue to cut oh seven we do an internal study that shows we are up in overall capacity this is that special appendix two three nine to forty eight in two thousand and eight zero nine we have a small dip why we sold our facility to georgia pacific those tonnes didn't come out in zero nine we go into bankruptcy because we are so heavily financed and i meant to say to those who are of this question these capacity cuts were public when our board approves them we do in fact report them for purposes of disclosures right then we go into bankruptcy ten cases so exactly so this is not a secret it's well documented we're doing it for the financial health of our company nonetheless we had heavily leveraged debt in two thousand and nine this is a funny coincidence but it was after the crisis we were scheduled to close on to refight in september on september seventeenth of zero nine credit markets crashed on september fifteenth we go into chapter eleven we continue to manage capacity with this extraordinary supervision we support the price increases for cost recovery there is not a record i can think of in a section one case in any circuit that would ever own this kind of evidence when you look at it holistically under the standard that started in market forces in one thousand nine hundred all the way through burden is that since she's been around since ninety six so yeah so i think you know the history here and one of the thing i'd say is on the closures they mentioned you know these kind of interim trades and and closing mills and the not letting them reoperation i would say the circle liability point is well documented  guess that you mentioned the circle of the remediation and that that that was the reason you weren't selling it to a different producer a to z environmental and of course the environmental liabilities extend backwards and forwards and sideways you know it's  circular and that was to the point where credit is kennedy wanted us to do more but to take that off the balance sheet right or do or to indemnify a buyer and in some of the instances we offered to sell the facility right like i think it was a snowflake one or the or and the barge didn't want to operate it and then for the like the remediation the promise is we will put it back into use as a mill and that takes it off the balance sheet so this is all undisputed i think when you weigh this against what they've got which is these inferences they simply cannot get to a jury on the record against thank you thank you very much all as you're walking up tell you that i would like you to comment a bit about the particular situation of whatever we want to call them today west rocker smurfit or whatever i'm sorry i missed the beginning of your question  i want you to talk about the west rock situation certainly so let me first with regard to that address what i think we've got to show and that is that if there was a preexisting  conspiracy in which smurfit was participating than when they said on july one that when they announced that price increase and they ms pac has ignored the internal e mail that says we always point i'm saying to rejoin that agreement after all the process that's gone on through the bankruptcy and if those if those agreements if the if those price concerted price increases were pursuant to agreement than choosing evidence of agreement because if they had agreed pre bankruptcy there was no way through all from the conspiracy and what do we have anything from ip that says and we always expect west rock and i'll just call them that for simplicity to follow us who has promised us they will always do what we did we don't have anything like that what what you have your honor is all of the evidence of the existence of a conspiracy in which both ip and west rock were participating and we have nothing from that says it is our understanding or expectation or whatever other word you want to use that west rock is going to follow us so we were are back is covered because you know we're going to take this step  again i missed half as misspoke when she said that georgia pacific excuse me smurfit increase capacity or for thirty five percent georgia pacific took out and indeed there's an e mail that says we've done our market smurfit took out a million tonnes of capacity but they increased by thirty five percent with the productivity per mill which is a completely different issue which is all fine but the point is that the email there's emails that refer to the fact that they have done their part to support a price increase and therefore and that is suggestive of the fact that they were working pursuant to obligation there's an email from smurfit october two thousand and six in the joint appendix a six seventeen in which smurfit says we have little choice but to join the price increase even though they thought it was not well timed that suggests a sense of obligation not independent choice which again a jury could see as evidence of agreement there is at a six twenty from up from december of two thousand nine we have no choice but to support the pricing initiative that others had had announced the district court completely ignored the twenty vice president level calls you know in may of two thousand and eight that proceeded the announcement of the price increase including calls between george pacific and smurfit and including that were participated in by the executive at george pacific who was controlling the degree of production and inventory to comply with  the the increase there it's ignoring the evidence the prior evidence of increased we've talked about the p c a memo but there are not and now you need to wrap up i think well your honor and i would just also say  taking economic downtime whether with regard to whether there was an enforcement mechanism and also my last statement i promised ok was that there was no evidence of enforcement and h f and the high fructose case what there was was a suggestion that they had the ability to to enforce by virtue of increased capacity and of course there was exactly the same sort of evidence here that you're on all right thank you very much thanks to all counsel we will take the case under advisement in the court is going to take a brief recess