### FILED U.S. COURT OF APPEALS ELEVENTH CIRCUIT September 22, 2003 THOMAS K. KAHN CLERK

* Honorable Jane A. Restani, Judge, United States Court of International Trade, sitting by designation. [PUBLISH]

IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH

CIRCUIT

________________________ No. 02-14037

________________________ D. C. Docket No. 00-00447-CV-JOF-1 WILLIAMSON OIL COMPANY, INC., on behalf of itself a

nd all others similarly situated, HOLIDAY WHOLESALE GROCERY CO., et al., Plaintiffs-Appe llants,

versus PHILIP MORRIS USA, R.J. REYNOLDS TOBACCO CO., et al., Defendants-Appe llees.

________________________ Appeal from the United States District Court for the Northern D

istrict of Georgia

_________________________ (September

22, 2003) Before MARCUS and WILSON, Circuit Jud ges, and RESTANI * , Judge. MARCUS, Circuit Judge:2

This is an antitrust a

ction brought pursuant t

o section 1 of the Sher

man Act, 15 U.S.C. § 1,

and sections 4 and 16 of the Clayton Ac

t, 15 U.S.C. §§ 15 and 26, by a class of sev

eral hundred cigar

ette wholesalers

(“the class”

or “the wholesalers”) a

gainst Philip Morris,

Inc. (“PM”

), R.J. Rey

nolds Tobacco Co. (“RJR”), Brown & William son Tobacco Corp. (“B&W”) and Lorillard Tobacco Co. (“Lori

llard”) (collect

ively “the manufacturer

s”). The class a

lleges that the manufacturers conspired between 1993 and 2000 to fix cigarette prices at unnaturally high levels, and that this collusion resulted in wholesale list price overcharges of nearly $12 billion. The district court ultimately entered sum mary judgment in favor of the manufacturers. It reasoned that the wholesalers had failed to demonstrate the existence of a “plus factor,” as is necessary to create an inference of a pr

ice fixing conspirac

y, and that eve

n if the class had show

n that a plus factor was pr

esent, the ma

nufacturers wer

e able to rebut fully

the inference of collusion, as the economic realiti es of the 1990s cigare

tte market re

ndered the class’s conspira

cy theory un

tenable. Rather

, the district cour

t held that the manufacturer

s’ pricing behavior

evidenced nothing m

ore than “consc

ious parallelism, ” a perfectly

legal phenomenon

commonly

associated with oligopolistic industrie s.1 Liggett Group, Inc. is not a party to this action. 3 On appeal, the w

holesalers say that the district cou rt misapplied th

e summary judgment standa

rd, that they pr

esented sufficient

evidence to withsta

nd the manufactur

ers’ motions,

and that the court er

red by excluding portions of the testimony proffered by their primar y expert witness. In the end, we conclude that none of the class’ s arguments ar e compelling and

that the district cou

rt’s treatm

ent of the wealth of co

mplicated issue s in this case was nua nced, insightful and, ultimately, correct. Accordingly, we affirm the court’s entry of final sum mary judgment in fa

vor of PM, RJR, B &W and Lorillar d.

I The modern American tobacco industry is a classic oligopoly.Between 1993 and 1999, appellees -- the nation’s four largest cigarette manufacturers -- along with Liggett Gro up, Inc., 1 manufactured more than 97% of the cigarettes sold in the United States. Moreover, the composition of the industry has been remarkably stable over time, a condition that has resulted largely from the fact that during the twentieth century the major tobacco players engaged in m inimal price competition. B ecause price fluc tuations were rel

atively rare,

smokers typ

ically2 As these labels sug gest, the diffe

rence between

these categor

ies of cigaret

tes is simply one of price.

3 For example, between 1993-2000, over 90% of Lorillard’s sales were in the pre mium market. 4 had no reason to change brands, brand loyalties were solidified and sizable market share shifts were unco mmon. During the early

1990s, however, a

price gap widened b etween prem ium brands like Marlbor

o, Newport and Ca

mel and discount a

nd deep discount brands 2 such as GPC, Basic and Doral. T his price differe

ntial was the resul

t of extremely competitive pricing of the non-premium brands, especially by B&W and RJR, which focused a lar

ge percentage of t

heir competiti

ve efforts on the dis count and deep discount ma

rkets. This led som

e “premi um smokers”

to shift to one of the non-premium

brands, and by 19 93 these brands had ca ptured over 40% of th

e United States market. At that time, there w ere 10 different wholesale list price points, i.e., c

igarette price tie

rs. Although this trend toward the discount and deep discount brands benefitted RJR an d B&W, i t was e xtreme ly und esira ble fr om the p erspe ctive of pre miumintensive manuf

acturers like PM a

nd Lorillard. 3 As suc h, PM - - whic h at th e time was (and rem

ains) the mark

et leader, with a market shar e that ranged from

42% to 50% during the period o f the alleged conspir acy -- sought in A

pril, 1992 to raise5

the price of its lowest tier products by $4 per thousand. This effort was unsuccessful, howe

ver, because RJR

, B&W and Lori

llard did not follow su

it, and PM was forced to r

escind its price inc

rease. Although P

M again attempt

ed to increase its deep discount prices in March, 1993, this effort similarly was rebuffed by its compe

titors. Though temporar

ily unsuccessful , PM continued looking for ways to reverse the trend toward discount cigarettes, and roughly one year after its failed $4 per thousand price increase it found one . On April 2, 1993 , PM decided to take what appellants refer to as “the single boldest com

mercial m

ove in U.S. ciga

rette market history”: it announced that it was cutting the retail price of Marlboro cigarettes -- w

hich were by f

ar the single best se

lling brand in Am

erica, enjoy

ing a 21% market share -- by 40 cents per pack and foregoing price increases on other premiu m brand s “for t he for eseea ble fu ture. ” Apri l 2, 19 93 su bseq uent ly beca me widely known thr

oughout the industry

as “Marlboro F

riday.” This

highly competitive pri

cing decision was ex

tremely significant for seve ral reasons. Fir

st, it left no doubt that PM

was willing to take

drastic compe

titive measure s (indeed, to sacrifice profits ) in order to protect t he market share of its flags hip brand. Second and quite im

portantly, it sl

immed the p

rice gap between premium a nd discount cigarettes. Because this price differential was constricted, consumers4 For example, PM’s income from operations dropped by more than $2 billion in 1993

alone. Moreover, on April 2, 1993 the stock of its parent company, now called Altria Gr oup, Inc., plummeted from a price of $64 1/8 to $49 3/8, a 23% loss that reduced the company’s market capitalization by approximately $13 billion. 6 suddenly had less of an economic incentive to purchase discount cigarettes, and as a result premium brands like Marlboro regained some of m arket share they had lost prior to Marlb oro Friday. Finally, it set off a price war among appellees, as RJR, B&W and Lorillard were imm

ediately confr

onted with a need to r

espond in some wa

y to PM’s bold action. In order t

o remain com

petitive, these m

anufacturers m

atched PM’s ret

ail price reductions. Although these prici ng actions cut into the m

arket share held by discount brands gener

ally, and thus le

d to a reduction in the overall share held b y RJR and B&W, w

hich, as stated, w

ere more hea

vily invested in the se brands, the decision to match PM’s price reduction meant that no manufacturer suff ered unduly large market share los ses. However, this vast decrease in cigarette prices was disastrous for PM, RJR, B&W and Lorilla

rd alike in term

s of profits, 4 and appellees wer e forced to rethink their profitability

strategies. Indeed, appellants rec ognize that this econom

ic landscape becam

e especially di

fficult in light of inc

reasing regulation o f the industry and the su

rge of health-rel

ated litigation. T

o exacerbate its competitors’7

predicament, on July 20, 1993, PM announced that its Marlboro Friday price reduction would be m

ade permanent

and expanded to all of

its premium

brands, e.g., Parliam

ent and Virginia Sl

ims. Moreover

, PM simultane

ously lowered t

he wholesale price of its discount cigarettes and raised the wholesale price of its deep discount brands by 1 0 cents per pack, t hereby consolida

ting the prices of the se brand categories.This action reduce d what had been 10 pri

ce points in the American cigarette market to four: 85 m m (regular length) premium cigarettes occupied one price t

ier, 100 mm

(extra-long) pre

miums occup

ied another, and 85 mm and 100 mm discou nts occup ied the remain ing two tie rs. Again, PM ’s competitors pro

mptly m atched these newly

announced prices. What’s m ore, the very next day

RJR announced that it

would collapse the pr

ices of its regular

and 100 mm cigarettes, thereby reducing the price tiers to two: premium and discount. PM, B&W and Lorillard quick ly followed suit. Appellants contend th

at it is only at thi s point that PM, RJR, B&W and Lorillard began conspiring to fix and steadily increase prices to make

up for the tremendous fina

ncial losses they

suffered as a cons equence of this price war. The class says that P

M’s actions on Mar

lboro Friday co

nstructively inf

ormed its competitors tha

t price discounting to g

ain market sha

re would no longer be tolerated, and tha

t only when such efforts were aba ndoned, and the5 As the district court recognized, and will be discussed infra , this statement is taken out of

context. Broughton’s full statement was that “BAT may be one of those who star ted the price war in the U.S., but we have no wish to escalate it. But we shall be re ady to respo

nd tactically where necessary .” Holiday Wholesale Grocery v. Philip Morris, I nc. , 231 F. Supp. 2d 1253, 1278 (N.D. Ga. 2002) (emphasis added). 8 premium/di scount price gap nar rowed, could pric es again rise. By appellants’ account, the manufacturers’ conspiracy began in earnest when appellees began using trade press --

i.e., tobacco i

ndustry financia

l analysts like G

ary Black --

to “signal” each other regarding the ir willingness to com

ply with PM’ s implicit demands so as to f

acilitate price i

ncreases. For e

xample, the c

lass points to a

statement m

ade by Martin B

roughton, the CEO

and Deputy Chai

rman of Briti sh American T

obacco (“BA

T”), B&W’ s parent compan y, that “B AT may b e one of those who started th e price war in the U.S., but we hav e no wish to escalate i t.” 5 Appellants argue th

at this stateme

nt somehow was

a signal sent by B &W to its competitors tha

t B&W was will

ing to reduce or end pr

ice competitio

n. The class alleges that RJR co

nveyed a sim

ilar message o

n November 2,

1993 by publicly announcing that it would no longer sacrifice profitability for market share. Appellants say that PM signaled its acceptance of its competitors’ overtures by putting its distri

butors on “perm

anent allocation” - - that is, limi ting the quantities of pro duct the distribu tors could order -- on November 5, 1993. Historically,

this practice had be

en impleme

nted as a tempor

ary measu

re prior to a6 There are 20 cigarettes in a standard pack and 10 packs (200 cig arettes) in a standard carton. Actually, RJR’s November 8, 1993 pricing action increased premium wholesale pr ices by approximat

ely 4% from

their post-Marlbo

ro Friday levels and incre

ased discount whol

esale prices by a

pproximately 5 % from their post- Marlboro Friday

levels. 9 price increase,

with the purpose bein

g to prevent the whole salers from e ngaging in “trade loading, ” i.e., stocking up on cigarettes bef ore the increase so as to deprive appellees of the bene fit of thei r price adju stment. The cl ass says tha t PM’s placement of i

ts wholesalers on pe

rmanent alloc ation actually w as a signal that the price increase sough t by RJR, B&W and Lorillard was coming. Appellants suggest tha

t RJR responded to PM ’s signal on Novem ber 8, 1993 with one last signa

l of its own. Spec

ifically, the

class argues that by announcing an increa

se of $2 per thousand c

igarettes (4¢ per p ack) 6 in both the premium and discount categories, and thus maintaining the constricted discount /premium price gap, RJR in dicated th at it was acc eding to P M’s conditions for increasing prices. By November 22, 1993, PM, B&W and L orillard had matched RJR ’s increase. T he class argues that

it was in the econom

ic interests of RJR and B&W to attempt to widen the premium -discount price gap, and that their failure to do so is evidence of collu sion. This initial RJR-led price increase was followed by eleven more parallel increases between May 4, 199 5 and January 14, 2000. See Holiday Whol esale10

Grocery , 231 F. Supp. 2d at 1264 (detailing these increases). Th e class contends that not only is this synchronous m ovement evidence of a price fixing a greement, but that many

of these increase s were not in the economic interest of all four alleged co-conspira

tors. For exam

ple, appellants ar

gue that on Novem

ber 23, 1998, following the in

dustry’s settl

ement of healt

h care litigation w

ith numerous state attorneys general, PM raised its list prices by $22.50 per thousand (45¢ per pack), which wa

s more than wa

s needed to offset the

settlement cos

ts. Although RJR, B&W and Lorillard matched the increase, the class say s that had PM behaved rationally it would have increased prices less, as it was in a stronger financial position tha

n its competitor

s, who would have be

en forced to forfe

it market share in order to remain competi tive. Appellants contend th

at signaling was also

accomplished th

rough the use of “credit m emos” that acc

ompanied the m

anufacturers’ price increases.The class says that these m

emos granted w

holesalers credits

for the difference between the old (pre-increase

) prices and the new

prices for severa

l weeks after the announcement of a price in crease that purported ly was immediately effective. This allegedly was an opportunity for the competitors of the manufacturer that implement

ed the increase to m

atch the increase

before the imp

lementing manufacturer

began to profit from

it.11

The manufac

turers respond to the

class’s signaling a

llegations by point

ing to several facets of th e record that undermine app ellees’ allegations o f conspiracy. Preliminaril

y, PM, RJR,

B&W and Lorilla

rd observe that altho

ugh wholesale

price competition lar

gely abated duri

ng the alleged conspir

acy period, th

is resulted in significant part from a shift in their competitive efforts to the retail arena. Indeed, during the alleged co

nspiracy period

, the manufac

turers spent on reta

il competition more than twice the amount the wholesalers claim to have been overcharged. For

example, fr

om 1994 to 1999, PM ’s spending on retai l promotions and incentive program s more than double

d. In 1999 alone, PM

-- the company that appellants sa y led the price fixing agr eement -- spent nearly $2.9 billion (60% of its ope

rating income)

on retail promo

tions, couponing and its retailer incentiv

e program. N

otably, during 199 8, retail com petition within the tobacco industry was so intense that R JR, B&W and Lo

rillard brought an an

titrust and unfair competition suit against PM based on PM’s unilateral adoption of a program that it called “Retail Leaders.” See R.J. Reynolds Tobacco Co. v. P

hilip Morris, Inc. , 199 F. Supp. 2d 362, 36 5 (M.D.N.C. 2002). This shift to retail

competition wa

s efficacious, R

JR says, beca

use (1) wholesalers cannot, by themselves, increase demand for a ppellees’ products, as demand necessa

rily is generat

ed by consume

rs; (2) retail pro

motions can be12

applied more precisely than wholesale incentives, for example, a “buy one pack get a second pack fr

ee” promotion can be targeted to con venience stores tha

t sell cigarettes by t

he pack as opposed to re

tail outlets that sell

them by the carton; (3) similarly, retail promoti

ons serve as targete

d defensive response s to the competitive init

iatives of other m

anufacturers, a

nd this targeting is m

ore easily accomplished a

t the retail level;

(4) manufact

urers cannot guara

ntee that wholesale list price reductio

ns will be passed thr

ough both the wholesale

rs and retailers t

o consumers, an

d that the only sur

e-fire way

to guaranty ret

ail savings is through retail-targeted measures; and (5) unlike wholesale incentives, retail price promotions help manufacturers compete for retail advertising and display space, which is of paramount importance from a m arketing perspective. Moreover, it is indisputable that from 1993 to 1996, the manufacturers increased wholesale l ist prices only four times fo r a total of 16 cents p er pack, a sum less than half the price decrease that resulted from PM’s actions on Marlboro Friday. Accordingly, during the first half of the alleged conspiracy period, price s were uniformly lower and rose at a substantia

lly slower pac e than during the competitive tim

e prior to the conspir

acy’s alleg

ed onset. Indeed,

appellees note, it was only five y

ears later (durin

g 1998), as a result of the health care settlements, that cigarette prices surpassed their pre-Marlboro Friday levels. In fact, adjusted7 This allegation is distinct from the class’s argument that appellees’ adoption of

permanent allocation programs was a signal to their competitors. However, appellees answ er both of these allocation-based attacks in the same way, as explained infra

. 13 for settlement costs, federal excise tax increases and inflation, wholesale list prices did not reach these le

vels until August, 1999

. The evidence also establishes that significant market share shifts occurred within the tobacco in

dustry during the a

lleged conspiracy

period. In fact,

from 1993 to 2000, PM’s share of the United States market rose 20%, Lorillard’s share rose nearly 50%, RJR’s share fell approximately 25% and B& W’s share declined roughly 19%. T

hese changes in appel

lees’ respecti

ve market shar

es were at least as great as those tha

t occurred betwe

en 1980 and 1991, an unque stionably competitive per

iod. For exam

ple, RJR lost twic e as much m arket share from

1993 to 2000 as it did fr om 1982-1991. The class also labe

ls as part of the cons

piracy appelle

es’ adoption of permanent all

ocation program

s despite the fact th

at they each ha

d excess manufacturing

capacities. 7 According to the cl ass, restricting s

upply in the face

of consumer dem

and for more pr

oduct was directly

contrary to the

manufacture

rs’ economic interests and t hus indicative of illegal collusio n. Appellants also arg

ue PM, RJR, B&W

and Lorillard fur

thered their collusive enterpris e by exchanging sa les data through a com

mon consultant,8 Specifically, PM required its wholesale distributors to provide it with information

concerning the

ir shipments of all b

rands of cigar

ettes. 14 Management Sc

ience Associates (“MSA”), which allegedly

enabled appellees t

o ensure that all we

re adhering to their

allocation program

s and to detect and puni sh what plaintiffs’ expert Franklin M. Fisher termed “defe ctions from an industry understanding on price .” The MSA sy stem tracks shi

pments from

the manufacturers to wholesalers and from the wholesalers to retailers and provides reports to each appe

llee regarding the shipments of its competitors. A ppellants allege that although i

n 1994 PM began collec

ting sales data on RJR

, B&W and Lorillard through M SA, 8 and thereby inc urred a great com

petitive advantage,

in 1995 it inexplicably began sharing this system with its competitors. Moreover, the class posits, ove

r time the MSA

system has b een modified to make the cigarette market more transparent, and all of these alterations have been implemented with the unanimous consent of PM, RJR, B&W and Lori llard. Appellants also desi

gnate other activiti

es purportedly un

dertaken by appellees as non-com

petitive. First,

they say tha

t PM, RJR and B&W

(along with other manufac

turers) conspired d

uring the 1950s to refr

ain from seeki

ng any competitive adv

antage by develo

ping more health

-conscious tobacco pr

oducts or by competing

on the basis of health generally. T he class argues that

this9 It is undisp uted that s ince 1977 Lori llard has n ot partici pated in any of t he foreign

markets discusse

d by appella

nts. 15 understanding rem

ained in effect dur

ing the conspiracy

period, and say

s that this is further evidence tha t appellees agreed no t to compete on pricing g rounds. Second, the class contends that PM, RJR and B&W 9 explicitly fixed prices in oth er coun tries - - inclu ding Ar gentin a, Canad a, Cost a Rica, F rance, H ungary, Saudi Arabia and V

enezuela, am

ong others -- as we

ll, and that they

did so as a “trial run” for their price fixing activities in the United States. They say that appellees’ “experience recognizing their competitors’ signals on price coordination in foreign markets would facilitate collusion in the U.S. market.” Third, the class designates as evidence of a price fixing conspiracy the very structure and history of the tobacco industry. It specifically points to the facts that this industry fea

tures a concentrat

ion of sellers, ine

lastic demand a

t competitive price s, hig h barr iers t o entr y, a fun gibl e prod uct, p rinci pal fi rms sel ling at the same level in the chain of

distribution, price s that can be changed quickly, cooper

ative practices and a record of antitrust violations. Fourth, the class alleges that appellees conducted little analysis of whether to implement each of the eleven individual price increases between 199 3 and 2000.16

Fifth, appellants say that although w ide market sha

re shifts indisputably occurred during the alleged conspiracy period, collusion among the manufacturers is nevertheless evidenced by the dampening during this period of the even wider market share

swings that pervade

d between 1991 and 1993. Sixth, the class claims that appellees enjoyed numerous opportunities to conspire, and says that this is furthe r evide nce tha t they act ually di d collu sively f ix pric es. Fina lly, appellants assert th

at the manufac

turers’ consolida

tion of control over pr

icing decisions in the hands of

a select few high ranking corporate of ficers represen

ts additional evidence o f collusion. The class contends t

hat the efficacy

of the conspiracy

is established by its results. Betwee

n Marlboro Friday

(April 2, 1993) an

d February, 2 000, cigarette prices rose more than $1.17 per pack, and appellants say that they were overcharged -- tha

t is, charged m

ore than they w

ould have been in the a

bsence of the conspiracy - - a total of $11.9 bil lion. They fur

ther note that the m

anufacturers’ profit margins increased during the period of the alleged conspiracy, whereas they fell during the early 199 0s, and that market shares s tabilized during this time. Appellees, by contrast, vigorously dispute each of these contentions. They do so most powerf

ully by reite

rating that (1) ret

ail competition throughout the alleged conspiracy

period was indisputa

bly intense; (2)

cigarette prices

actually17

were lower duri

ng most of the alleged conspi

racy period tha

n they had been pr

ior to Marlboro Friday; and (3) appellees’ market shares fluctuated far m ore dramatically during this time than could possibly be explained in the event of an industry-wide a

greement to fi

x prices (indeed, the market sha re shifts were a

t least as great as those tha

t occurred betwe

en the competit

ive years of 198 0-91). In fact, the only time

the market sha

re fluctuations we

re greater was

during the period between 1991 and 1993,

when the discount bra

nds made significant inroads into the market. In February,

2000, faced with t

his pattern of what

they perceive

d to be illegitimate,

collusive price incr

eases, several w

holesalers filed ind

ividual lawsuits in various judicial districts around the country. The Judicial Panel on Multidistrict Litigation consolidated these actions and transferred them to the United States District Court for

the Northern Dist

rict of Georgia,

where they w

ere assigned to Judge Forrester. Appellants subsequen tly filed an am

ended consolidated cl

ass action complain

t alleging that PM,

RJR, B&W and L

orillard conspired t

o fix prices in violation of

section 1 of the Sher

man Act, 15 U .S.C. § 1 and sec tions 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26. Appellants also alleged that the manufactur

ers had fraudulentl

y concealed the

ir activities, the

reby tolling the18

four year statute of limitatio ns that generally appli es to federal antitru st actions. See 15 U.S.C. § 15b. On appellees’ m

otion, the district court subsequently d ismissed without prejudice the fr

audulent concealm

ent allegations for failure to satisfy pleading requirements,

and struck from

the complaint a

s “evidence ple

ading” appellants’ claims regar

ding foreign mar

kets. On January

23, 2001, the court certified a class of “[a]ll p ersons in the United S tates . . . that p

urchased cigarett

es directly fr

om one or more of t

he Defendants, or

any parent, su

bsidiary or aff

iliate thereof, a

t any time from February 8, 1996 to February 8, 2000.” Notably, the district court rejected the wholesalers’ fraudulent concealment argume nt, and the class was temporally

limited by t

he four year a

ntitrust statute of li

mitations, 15 U .S.C. § 15b; claims that pertained to the period prior to February 8, 1996 were dismissed as untimely. On February 22, 2001, the district court granted the class leave to file a second amended complaint, fe aturing claims

under the same

sections of the Sherman and Clayton Acts. T he manufactur

ers again moved

to dismiss the allegations of fraudulent concealment and any claims for relief that concerned actions taken prior t

o February 8,

1996, and the court gr

anted both of these requests.19

Subsequently, on February 8, 2002, PM, RJR, B&W a nd Lorillard moved for final summary judgm ent on all claims against them. On July 11, 2002, in what can be fairly described as a comprehensive and well-reasoned opinion, the district court granted this m

otion, and it is the cor

rectness of this rul

ing that is at issue on appeal. In brief

, appellants argue

that the district cou

rt applied an overly

stringent legal s tandar d in eva luatin g appel lees’ su mmary judgmen t motion . Specif ically, they claim

that the court im

properly requir

ed them to exclud

e all nonconspiratorial expl

anations for the m

anufacturers’ behavior and imp ermissibly weighed the evidence, thereby usur ping the function of the

jury. Appe

llants further contend that the district court erred by considering each piece of evidence they presented in isolation, as opposed to evaluating their proofs in concert . The wholesalers then identify 11 “plus factors,” see infra , and argue that ea ch plus factor creates a presumption tha t PM, RJR, B&W

and Lorillard consp

ired to fix cigarette prices . They say that this presum

ption enables them

to survive appellees ’ summary judgment m

otion. The class a

lso argues that the dis

trict court’s en

try of final summ

ary judgm

ent was improp er because it was predicated on the er

roneous exclus ion of p ortion s of Fis her’s ex pert te stimony. The manufac

turers respond by

defending the distric

t court’s opinion on it

s terms. The

y argue that the

court applied preci sely the corre ct summar

y judgment20

standard, that it di

d not improperly

weigh appellants’ proffered evidence or fail to consider that evidence in concert , that none of the court’s evidentiary rulings were erroneous and that non

e of the class’s a

lleged “plus fa

ctors” actually

tends to indicate a price f

ixing conspiracy any more th an it does rational,

lawful, competitive oligopolistic behavior. Distilled to its essence, the argument espoused by PM, RJR, B &W and Lorillar d is that in an oligopoly

, reason and econom

ic rationality often dictate parallel pricing behavior, and that the evidence presented by the class is pe

rfectly consis

tent with such “

conscious paralleli sm.” The manufacturer

s further assert t

hat various facts on w

hich appellants do not f

ocus, or that the class m

ischaracterize s, establish conclusively that appel lees’ behavior from 1993 through 200 0 is dramatically inconsis tent with any collusiv e behavior. Accordingly,

they say, even if appellants ha d established the exis

tence of a plus factor, and thus c

reated an infere

nce of conspiracy

, that inference

has been fully rebutted. For all of these reasons, the manufacturers assert that the district court properly entered final summary judgment in their favor.

II We review de novo a summar y judgment

ruling , applying the same legal standard used by the di strict court. See Johnson v. Bd. of Reg ents , 263 F.3d 1234,21

1242-43 (11 th Cir. 2001). In co nducting this exam

ination, we view the materials presented and all fa

ctual inferences in the light most f avorable to the non-m

oving party. See Adickes v. S.H . Kress & Co. , 398 U.S. 144, 157, 90 S. Ct. 1598, 1608 , 26 L. Ed.2d 142 (19 70). Summ ary judgm

ent is appropriate w

here “there is no genuine issue as to any

material fa

ct” and “the m

oving party is enti

tled to a judgment as a m

atter of law.”

Fed. R. Civ. P . 56(c). The bur den of demonstra

ting the satisfaction of this standard lies w ith the movant, who must presen t “pleadings, depositions, answer

s to interrogatories , and admissions on file, together w

ith the affidavits, if any” that establish the absence of any genuine, material fac tual dispute. Id. We review the district court’s exclusion of expert e vidence for an abuse

of discretion. See Maiz v. Virani , 253 F.3d 641, 662 (1 1 th Cir. 2001) (“We review a trial court’s ev

identiary rulin

gs on the admission

of expert witness t

estimony only for abuse of discre

tion.” (citing Toole v. Baxter H ealthcare Corp. , 253 F.3d 1307, 1312 (11 th Cir. 2000)).

A. The Summ

ary Judgmen

t Standard in the Pr

ice Fixing Context In order to fully

explain the summ

ary judgm

ent standard that we

apply in price fixing cases,

it is important t

o distinguish at the outse t between collusive10 Although this meeting of the minds need not be formal, it must transpire.

11 We have observed

that: Anoligopoly d

iffers from a mon

opoly in that no one firm

can control the market price of a produc t merel y by a ltering its own out

put. Where a market is highl

y concentr

ate d, ho wever, it is possible for seller s to share market power sufficient to control prices “by recognizing their shared economic interests and their interdependence with respect to price and

outputdecisions.” Brooke Group , 509 U.S. at 227, 113 S.Ct. a t 2 590. “Thus, the distinctive characteristic of oligopoly is recognized int

erdependence

among the leadin

g firms: the profit-maximizing choice of price and output for one depends on the choic es mad e by oth ers.” II A [Phillip E. Areeda & Herbert Hovenkam

p, Antitru st Law ¶ 404a (2d e

d. 2002)]. Bailey v. Allgas, Inc. , 284 F.3d 1237, 1251 (11 th Cir. 2002) (citations omitted). 22 price fixing, i.e ., a “m

eeting of the mi

nds” to collusively

control prices, 10 which is prohibited unde r the Sherman and Clayton Acts, and “conscious parallelis m,” which is not. As the Supreme Court has recognized, oligopolies -- of which the modern tobacco industry is by all measures a prime example 11 -- often feature coordinated pricing and related behaviors. See Brooke Group, Lt d. v. Brown & W

illiamson Tobacco Corp. , 509 U.S. 209, 227, 113 S. Ct. 2578, 2590, 125 L. Ed. 2d 168 (1993) ; United States v. V on’s Grocery

Co. , 384 U.S. 270, 300, 86 S. Ct. 1478, 1495, 16 L. Ed. 2d

555 (1966) (Stewar

t, J., dissenting)

(discussing “the

sort of consciously inter

dependent pricing tha

t is characteristi

c of a market

turning the corner toward oli

gopoly”). Indeed, we have explic itly recognize

d that “‘the23

distinctive charac

teristic of oligopoly

is recognized inter

dependence am

ong the leading firms: the profit-ma ximizing choice

of price and output f

or one depends on the choices made by others.’” Bailey , 284 F.3d at 1251 (quoting IIA Areeda & Hovenkamp, Antitrust Law ¶ 40 4a). When they are the product of a rational, independent calculus by each member of the oligopoly, as opposed to collusion, these types of synchronous actions have become known as “conscious parallelism.” The Court has defined this phenomenon as

“the process,

not in itself unlawf

ul, by which fi

rms in a concentrated m

arket might in effect share m onopoly power, setting their price s at a profit-maxim

izing, supracom

petitive level by

recognizing their sh

ared economic interests and their interdependence with respect to price and output decisions.” Brooke Group , 509 U.S. at 227, 113 S. Ct. at 2590 (citations omitted). “In other words,” we have

further explained,

“conscious para

llelism is the pr

actice of interdependent pricing in an oligopolistic market by competitor firms that realize that attempt s to cut pri ces usuall y reduce reven ue without increasin g any firm’s market share , but that simple price leadership i

n such a market

can readily inc

rease all competitors’ revenues.” City of Tuscaloosa v. Harcros Chems., Inc. , 158 F.3d 548, 570 (11 th Cir. 1998) (citat ions omitted). Thus, these behavi ors typically

result24

from firm s’ rational recognition that the m arket structure in

which they oper

ate will most easil

y yield prof

its by means

other than price co

mpetition. As numerous courts have recognized, it often is difficult to determine which of these situations --

illegal price fixin

g or conscious parall

elism -- is pre sent in a given case. This i s largely attr ibutable to the effor

ts typically

made by thos e who fall on the wrong sid e of this line to dis guise the illegal n ature of their endeavo rs. In this vein, we ha

ve recognized that: “[I]t is onl

y in rare case s that a plaintiff c an establish the exist ence of a conspiracy by showing an explicit agreement; most conspiracies are inferred from

the behavior of the a

lleged conspirators, ” and from other circumstantial evidence (economic and otherwise), such as barriers to entry and oth er market conditions. Harcros , 158 F.3d at 569 (quot ing Seagood Trading Corp. v. Jerrico, Inc. , 924 F.2d 1555, 1573 (11 th Cir. 1991)). In the unusual case w

here the plaintiff

is able to muster

direct evidence of price fixing, summary judgment is catego rically inappropriate. See In re Citric Acid Antitrust Li

tig. , 191 F.3d 1090, 1093 (9 th Cir. 1999) (“[Plaintiff] argues

. . .that it has produced direct evidence that [Defendant] entered into illegal pricefixing agreements with the admitted conspirators[,] in which case sum mary judgment would

, of course, be in

appropriate . . .

.” (citing McLaughlin v. Liu , 849 F.2d 1205, 1208 (9 th Cir. 1988) and T.W. Elec. Serv., Inc. v.Pacific Elec.25

Contracto rs Ass’n , 809 F.2d 626, 631-32 (9 th Cir. 1987))); In re Baby Food Antitrust Litig. , 166 F.3d 112, 117-1 8 (3d Cir. 1999). More frequently, price fixing plaintiffs are relegated to relying on indirect means of proof. The problem with this reliance on circum stantial evidence, however, is that s

uch evidence is by

its nature ambi

guous, and necessar

ily requires the draw

ing of one or mor

e inferences in or

der to substantiate c

laims of illegal conspiracy

. Over time , courts have becom e attuned to the econo

mic costs associated with using circumstantial evidence to distinguish between altogether lawful, independe

nt, consciously p arallel decision- making within an

oligopoly on the one hand, and ill egal, collusive pri ce fixing on the oth er. See, e.g. , Matsushita Elec. Indus. Co . v. Zenith Radio Corp. , 475 U.S. 574, 594, 106 S. Ct. 1348, 1360, 89 L. Ed. 2d 538 (19 86) (“[M]istaken inferences in cases such as this one are especially costly, because they chill the very conduct the antitrust laws are designed to protect. ‘[W]e must be concerned lest a rule or precedent that authorizes a sear

ch for a particula

r type of undesir

able pricing behavior

end up by discouraging legitim

ate price com

petition.’” (ci

ting Monsanto Co. v. Spr ay-Rite Serv. Corp. , 465 U.S. 752, 763-64, 104 S. Ct. 1464, 1470, 79 L. E d. 2d 775 (1984) and quoting Barry Wri

ght Corp. v. ITT

Grinnell Corp. , 724 F.2d 227, 234 (1 stCir. 1983)))

.26

This recognition is r

eflected in the sum

mary jud gment form

ulation that is employed in price fixing cas es. See PepsiCo, Inc. v.Coca-Cola Co. , 315 F.3d 101, 104 (2d

Cir. 2002) (“

In the context of anti

trust cases . . .summary

judgment is particularly

favored because of

the concern that pr

otracted litigation w

ill chill pro-competitiv

e market for

ces.”) (citati

on omitted). I

n order to ensure tha

t only potentially meritorious claims survive summ ary judgment, the Supreme Court has required that inferences of a price fixing conspiracy drawn from circum stantial evidence be reasonab le. See Matsushita , 475 U.S. at 588 , 106 S. Ct. at 135 6 (“Respondents .. . must show that the inference of conspiracy i s reasonable in light of the competing inferences of indepen dent action or coll usive action . . . .”). Indee d, “ant itrus t law l imits the ra nge o f permi ssib le inf erenc es fro m ambiguous evidence in a § 1 case.” Id. (emphasis added). In practice, this means that “[t]o survive a motion for summary judgment . . . a plaintiff seeking damages for [collusive price fixing] . . . must present evidence ‘that tends to exclude the possibility’ that the alleged conspirators acted independently.” Matsushita , 475 U.S. at 588 , 106 S. Ct. at 135 6 (quoting Monsanto , 465 U.S. at 764, 104 S. Ct. at 1471). Evidence that does not support the existence of a p

rice fixing conspira

cy any m ore strongly than

it supports conscious paralleli sm is insufficie nt to survive a defend

ant’s summ

ary judgm

ent27

motion. See id. (“[C]onduc t as consistent with pe

rmissible com

petition as with illegal conspiracy

does not, standing alon

e, support an infer

ence of antitrust conspiracy.”

(citing Monsanto , 465 U.S. at 764 , 104 S. Ct. at 147 0)) (other citatio n omitted); Harcros , 158 F.3d at 569 (“[P]laintiffs’ circum stantial documentary evidence is in equipois e, and in the absence of further evide nce of collusion, summary judgment agai

nst the plaintiffs w

ould be in order.”) ; id. (“‘A fact that can only be decided by

a coin toss has not been

proven by a prepo

nderance of the evidence, and can

not be submitted to

the jury.’ ” (quoting James v. Otis Elevator Co. , 854 F.2d 429, 432 n.3 (11 th Cir. 1988))). In applying these principles, we have fashioned a test under which price fixing plaintiffs m

ust demonstrate

the existence of “

plus factors” that r

emove their evidence from

the realm of e

quipoise and render t

hat evidence mo

re probative of conspiracy than of cons cious parallelism. See Harcros , 158 F.3d 570-71 (“ ‘[I]t is well settled in this c

ircuit that evidence

of conscious paralle

lism [alone] does not permit an inference of cons piracy unless the plain tiff [either] establish es that . . .each defendant engaging in the parallel action acted contrary to its economic selfinterest’ or offers other ‘plus factors’ tending to establish that the defendants were not engaging mer

ely in oligopolistic

price mainten

ance or price lea

dership but28

rather in a collusiv

e agreement t

o fix prices or other

wise restrain tr

ade.” (quoting Todorov , 921 F.2d at 1456 n. 30) (other citations o mitted). Although our caselaw has identified some specific plus factors, for example, “a showing that the defendants’ b ehavior would not be r easonable or explic able (i.e. not in their

legitimate economic self-int erest) if they

were not conspiring

to fix prices or otherwise restrain trade,” Harcros , 158 F.3d at 572, a ny showing by appellants that “tend[s] to exclude the possibility of independent action” can qualify as a “plus factor.” Id. at 571 n.35. In cases where the plaintiff establishes the existence of one

or more “

plus factors,” the se factors “on ly create a r

ebuttable presumption of a consp iracy which the defendant may defeat wit h his own evidence . . . .” Todorov , 921 F.2d at 1456 n.3 0. In short, there are three steps to the summary j udgment analysis in the price fixing context. First, the court must determine whether the plaintiff has established a patter

n of parallel behavi

or. Second, it m

ust decide whether

the plaintiff has dem

onstrated the existe

nce of one or mo

re plus factors tha

t “tends to exclude the possibility that the alleged conspirators acted independently.” Matsushita , 475 U.S. at 588 , 106 S. Ct. at 135 6 (internal punctuati on and citation omitted). The existence of such a plus factor generates an inference of illegal price fixing. Thi

rd, if the first tw

o steps are satisfie

d, the defendants m

ay rebut the29

inference of coll

usion by presenting

evidence establishi

ng that no reasonable factfinder could con clude that they entered i nto a price fixing co nspiracy. In undertaking this analysis, the district court is obligated to give the price fixing plaintiff(s)

“‘the full be

nefit of their proof

without tightly compartm

entalizing the vario

us factual com

ponents and wiping the slate clean of scrutiny of each.’” Holiday Wholesale Grocery , 231 F. Supp. 2d at

1268 (quoting Continental Ore Co . v. Union Carbide & Carbon Corp. , 370 U.S. 690, 699, 82 S. Ct. 1404, 1410, 8 L . Ed. 2d 777 (1962)) . However, as indicated by this discussion, it unquesti

onably is the duty

of the district cour

t to evaluate the evidence proffer

ed by the plaintif

fs not to ascertain i

ts credibility,

but instead to determine whether that evidence, if credited, “tends to” establish a conspiracy more than it indicates conscious parallelism. As the district court put this matter, “the impor

t of the piece of ci

rcumstantial e

vidence [that appel

lants argue constitutes a plus fac

tor] must ac

tually be of the i

mport that is asc

ribed to it by [appellants]. If, when consider ed in its entirety

, it is totally a

mbiguous or to the opposite effect, it . . . may not be relied upon by the j ury.” Id. at 1270. The district court then pr

operly observed

that a stateme

nt could not constitute a

plus factor -- i.e. , could not be said by a reasonable fac

tfinder to tend to exc

lude the possibility indepen

dent behavior or to es

tablish a price fixi

ng conspiracy --

(1) if it30

required the jury

to “engage in spe

culation and conjec

ture to such a degree

as to render its finding ‘a guess or mere possibility,’” id. at 1271 (quoting Daniels v. Twin Oa ks Nur sing Home , 692 F.2d 1321, 1326 ( 11 th Cir. 1982)); or (2) if to infer conspiracy fr

om the evidence

the jury nece ssarily would e ngage in “falla

cious reasoning.” Id. Moreover, “ if [appellants’]theory is econom ically sensele ss, no reasonable jury could find in its favor, and summary judgment should be granted.” Eastman Kodak Co. v. Image Tech.Servs., Inc. , 504 U.S. 451, 468-69, 112 S. Ct. 2072, 2083, 119 L. Ed. 2d 265 (1992). In this case, the di strict court set for th this standard corr

ectly and in deta

il, and none of appellants’ criticisms of the court’s articulation of the summary judgment standa

rd are persuasive.

The class say

s that the district co

urt required it to exclude all “

innocent” explanatio

ns for appellees’ conduct in order to sur vive summary judgment. H

owever, this plain

ly is incorrect. The court did not m andate that appellants excl

ude the possibility

of conscious paralle

lism in order to s

urvive summary judgment, but

instead it required

them to present some evidence that

“ tends to ” exclude lawful, synchronous behav

ior. This is prec

isely in line wit

h the method of proof e stablished by the S upreme Court i

n Matsushita

and refined by this court in Harcros . Nor, in a sim ilar vein, did the di strict court insist th at the existence of a conspiracy be the sole inference that a reasonable juror could draw31

from appellants’ evidence. Again, the court required only that the class’s evidence tend to exclude the poss

ibility of consci

ous parallelism

or, stated differ

ently, to establish a price fix ing conspiracy, nothi ng more, nothing less. The class al so is inco rrect inso far as it su ggests th at the Supr eme Court’s decision in Eastman Kodak casts doubt on the correctness of the summary judgment standa

rd applied by the district court. T he Court said in Eastman Kodak that “ Matsushita

demands only

that the nonmoving party’s infe rences be reasonable in order

to reach the jury

, a requirem

ent that was not inven

ted, but merely a rticulated, in tha

t decision.” 504 U. S. at 468, 112 S. C t. at 2083 (citing Matsushita , 475 U.S. at 587-88, 106 S. Ct. at 1356). As the district court explicitly recognized , see Holiday Wholesale Grocery , 231 F. Supp. 2d at 1270 n.9, the Court fur

ther held in Eastman Kodak that its “requirem

ent in Matsushita that the plaintiffs’ claims make economic sense did not introduce a special burden on plaintiffs facing summary judgme nt in antitrust cases.” 504 U.S. at 468, 112 S. Ct. at 2083. The class argues t

hat the district cour

t’s imposition o f a “tends to exc lude the possibility that the alleged conspirators acted independently” standard contradicted Eastman Kodak because it impo sed a “special burden” on antitrust plaintiffs. However, this argument is unpersuasive for at least two distinct32

reasons. First,

the “tends to exc

lude . . .” standa

rd itself was announ

ced by the Supreme Court

in Matsushita , and as such Eastman Kodak ’s reaffirm ation of Matsushita

reaffirms the correctness of t his standard as well. See Eastman Kodak , 504 U.S. at 468, 112 S. Ct. at 2083 (“ Matsushita demands only

that the nonmoving party’s inferences be reasonable in order to reach the jury .. . .”). Moreover, as recently as 1998 , in binding precede nt, we applied this standard unambig uously in Harcros , observing that “[t]o survive a motion for summ ary judgment or for a directed verdict,

a plaintiff seeking

damages for a

violation of § 1 mu

st present evidence ‘that tends to exclude the possibility’ that the alleged conspirators acted independently. [Such plaintiffs] , in other words, must show that th

e inference of conspiracy is r

easonable in light of t

he competing inf

erences of indepen

dent action or collusive action th

at could not have harm

ed respondents.” 158

F.3d at 570 (quoting Matsushita , 465 U.S. at 764, 104 S. Ct. at 1 471). Second, it also is firmly established that a price fixing plaintiff’s evidence must create a “

reasonable ” inference of co nspiracy in orde

r to withstand a summary judgment motion. See, e.g. , PepsiCo, Inc. , 315 F.3d at 105 (“ Although all reasonable inf

erences will be dr

awn in favor of the

non-movant, thos e inferences ‘m

ust be reasonable in l

ight of competing

inferences of acceptable conduct.’” (quot

ing Tops Mkts., Inc. v. Quality Mkts, Inc. , 142 F.3d 90, 95 (2d33

Cir. 1998))). T

he “tends to exc

lude . . .” standa

rd articulated in Matsushita and applied by the dist

rict court in this ca

se simply re

presents an explica

tion of this requirement; it does not represent a new hurdle. In other words, evidence creates the requisite reas onable inference o f conspiracy if it “tends to excl

ude the possibility that the alleged conspirators acted independently.” Thus, the summary judgment standa

rd applied by the district court does no t in any way

run afoul of Eastman Kodak

. We also note that Eastman Kodak , Matsushita and Harcroswere accurately c

ited at length by t

he district court in t

his case in discussing t

he summary judgment standard to be applie d in price fixing cas es. Similarly unpersuasive is appel

lants’ argum

ent that although they

must demonstrate the

existence of one or more plus fact ors, the evidence c

onstituting such a factor m

ust merely

“tend to establi sh” a conspiracy , as opposed to “t

end to exclude” independent action. In support of this proposition the class cites Harcros , where we sai

d: [I]t is well se

ttled in this circuit t

hat evidence of cons cious parallelism [alone] does not permit an inference of conspiracy unless the plaintiff [either] establishes that, assuming there is no conspiracy, each defendant engaging in

the parallel acti

on acted contrary

to its economic self-interest, or offers other “ plus factors” tendin

g to establish that the def

endants were not en

gaging merely

in oligopolistic price maintenance or price leadersh ip but rather in a collusive agreement to fix prices or otherwise restrain trade.34

158 F.3d at 570-71 ( citations and int ernal punctuation omitted) (emphasis added). However, the di stinction that appella nts draw between this language and the “tends to exclude

. . .” standard announced in Matsushita is semantic only

; it makes no substanti

ve difference. Evidence that tend s to exclude the possibil

ity of independent action necessarily tends to es tablish c ollusion . The class’s formulation is simply the lin guistic flip side of th

e test announced in Matsushita

. Indeed, in Harcroswe used these formulation s interchangeably. Compare 158 F.3d at 570 (“[

A] plaintiff seeking damages f or a violation of § 1 m

ust present evidence that tends to exclude the possibility that the alleged conspirators acted independently”)

(internal punctuati

on and citations om

itted) (empha

sis added) with id. at 570-71 (discuss ing “‘plus fac tors’ tending to establish that the defendants were .

. . in a collusive a

greement to fi

x prices or otherw

ise restrain trade”) (emphasis added). Appellants further

argue that because

of its “fundam

ental error” in conflating the “

tends to exclude . . .” and “tends t o establish . . .”

standards in the context of the plus fa

ctor analysis,

the district court e

xamined each pi

ece of evidence separate

ly to determ

ine whether sum

mary jud gment was appr

opriate instead of considering the wholesalers’ proofs in concert. As we observed above, however, this asserti on is unfounded. See Holiday Wholesale Grocery , 231 F.35

Supp. 2d at 1268 (“The court is . . . mindful that it must consider the evidence presented by Pl

aintiffs as a whole

and that ‘plaintif

fs should be given the f

ull benefit of their proof without tightly compartmentalizing the various factual components and w

iping the slate clea

n after scrutiny

of each.’” (q

uoting Continental Ore Co

. , 370 U.S. at 699 , 82 S. Ct. at 1410 )); id. at 1270 (“[T] he import of the piece of circumstantial evidence must actually be of the import that is ascribed to it by Plain tiffs. If, when considered in i ts entirety , it is totally ambiguous or to the

opposite effect,

it is not relevant and

may not be r

elied upon by the jury .”) (emphas

is added). The cl

ass is correct that

the district court a

t one point indicated that it was analyzing “whether a piece of evidence can be admitted as relevant because it creates a reasonable inference.” Id. However, in the face of the foregoing statem

ents, the stray

comment to

which the class refers is vastly insufficient to establish that the court did not actually examine the class’s evidence as a whole. This is especially

so given that the distri

ct court ultima

tely expressed its conclu sion as being “t hat the eviden ce addu ced by Pl aintif fs does not sin gularl y or in combination

exclude the possibility that Defendants acted independently.” Id. at 1328 (emphasi s added). Instead, the court’s state

ment indicates simply that t he district court prope

rly analyz

ed appellants’ al

leged plus factors bo

th individually36

and in concert. Under Matsushita and Harcros , this certainly did not constitute legal error. Mor

eover, we have i

ndependently re

viewed appellants’ alleged plus factors, both indivi

dually and in com

bination, and we ag

ree that none of the se factors actually

tends to exclude the po ssibility of indepe ndent behavior or tend

s to establish

a price fixing agre

ement. The class further

argues that the distr

ict court impro

perly substituted

its assessment of t

he evidence for tha

t of the jury,

i.e., that it ac

ted as factfinder

at the summary judgment stage . We think the cou rt did no such thing. In

stead, it mer

ely ascertained, as it was required to do under Matsushita and Harcros , whether appellants’ evidence tended to exclude the possibility of independent action. It made no finding as to whet her such independ ent action did or di d not exist. Although it did make determinations as to the reasonableness of the inferences that could be drawn f

rom the evidence, these were t hreshold legal deter

minations that appropriately

were made by

the district court. Finally, appe

llants argue that the

district court fail

ed to view the eviden

ce in the light most fa

vorable to them and that it also faile d to distinguish betwee

n the existence of a consp

iracy and its ef

ficacy. Ho

wever, they

neither explain nor supp ort th ese al legat ions , and a s such we are u nabl e to ev aluat e them.37

B. The District Cour

t’s Application of

the Antitrust Sum

mary Judgm

ent Standard in This Ca

se As a prelimina

ry matter , no party conte sts the satisfaction of the first prong of our inquiry, viz. , the existence of parallel pricing be

havior. As evidenced by the repeated, synchronous pricing decisions that occurred within the tobacco industry betwee

n 1993 and 2000, appellees plainly price d their products in parallel. Similarly uncontroversial is appellants’ lack of direct evidence of a price fixing conspiracy

among PM, RJR

, B&W and Lori

llard. Although the

class argued in the district court that it had presented such evidence, it has abandoned this contention on appea

l. Accordingly

, the key questi

ons on appeal are (1) whether appellants have shown the existence of a plus factor so as to create an inference of conspiracy; and (2) if so, whether appellees are able to rebut that inference.

1. Appellants’ Alleged Plus Factors After articulat

ing the summ

ary judgm

ent standard in an ant

itrust case, the district court delineated eleven distinct factors that appellants had denominated “plus factors. ” These are: “ (1) signaling of inten

tions; (2) perm

anent allocations programs; (3) monitoring of sales; (4) actions taken contrary to economic self-38

interest, including (a) little analysis of whether to follow price increases, (b) B&W and RJR pulling away from the discount cigarette market, (c) the May 1995 price increase lead by

RJR and followed by

Philip Morris, (d)

Philip Morris’ a

greement to base the initial [Management Science Associates] . . . pay ments on market capitalization ra

ther than mark

et share, and (e)

‘excessive’ p

rice increases a

fter the MSA; (5) nature of the market; (6) strong motivation; (7) reduction in the number of price tiers; (8 ) opportunities to consp ire; (9) pricing de

cisions made at

high levels; (10) the smoking and health conspiracy; and (11) foreign conspiracies.” Holiday Wholesale Grocery , 231 F. Supp. 2d at 1274. Although the district court found that only the first four of these factors “merit[ed] ser ious consideration,” id. , it analyzed each of them in detail. The district court ultimately concluded that none of them actually tended to exclude the possibility of independent behavior, and the class contes ts the correctness of the court’s conclusi ons as to each factor. Accordingly,

we consider each

of these alleged plus

factors.

a. Signaling First, appellants identify several “signals” that allegedly were transm itted among PM, RJR

, B&W and Lori

llard as to their pri

cing intentions. The

class claims that the se signals were the means by w

hich appellees’ p

rice fixing39

conspiracy wa

s carried out, as t

he manufactur

ers formulate

d and cemented t

heir plans to collusively fix cigarette prices by indirectly comm unicating with each other through media ou tlets and other pub lic announcements. However, the district court rejected these communications as a plus factor, saying that it fou

nd: [The class’s] theory of signal ing among the com

panies to be based on a combination of

statements tak

en out of context, as

well as ominous readings of typical industry repor ting on strategy.To reach the inferences suggeste

d would require the j ury to engage in sp eculation and does not tend to exclude the possibility that [appellees] acted independently. . . . [Appella nts] have done nothing

more than show that in an oligop oly, each company is aware of the others ’ actions. This is the nature of the economic interdependence of the companies in an oligopoly. Holiday Wholesale Grocery , 231 F. Supp. 2d at 1275. The district court further noted that “in com

petitive marke

ts, particularly

oligopolies, com

panies will monitor each other’s communication s with the market in order to make their own strategic decisions[. As such], antitrust law permits such discussions even when they relate to pricing because the ‘dissemination of price information is not itself a per se violation of the Sherman Act.’” Id. at 1276 (quoting United States v. Citizens and S. N

at’l Bank , 422 U.S. 86, 1 13, 95 S. Ct. 2099, 2115, 45 L. Ed. 2 d 41 (1975)). In this v

ein, lead counsel f

or the class concede

d at oral argum

ent before the distric

t court on the ma

nufacturers’ su

mmary judgment m

otions that the40

ultimate outcom

e of all of the state

ments and action

s that appellants labe

l signals was to return the tobacco industry from the pricing chaos that followed Marlboro Friday to a “traditional normal ol igopoly,” which, of cours e, is perfectly legal. Id. at 1316. Nonetheless, the class posits that the signaling among appellees began when PM publicly announ

ced on Marlboro Fri

day that its prospe

ctive strategy

with respect to Marlbor

o was to “grow

market share

and longer term

profits,” and that

it would “forgo an

y further price increases on pre mium brands

for the foreseea

ble future.” The tr

anslation of this announ

cement, the c

lass says, is tha

t PM would not engage in any m

ore price cuts provi

ded that its compe

titors did not attem

pt to alter the price gap bet ween premium and discount or d eep discount cigar ettes. Thus, appellants do not argue that the actions taken by PM on Marlboro Friday were

in any way anti-competiti ve; in fact, they

explicitly conc ede (as surely they must) that this was an exce ptionally competitive move. See generally NCAA v. Bd. of Regents of Univ. of Okla. , 468 U.S. 85, 1 04-106 & n.27, 104 S.Ct. 2948, 2961-62 & n.27, 82 L. Ed . 2d 70 (198 4) (discus sing gene rally the She rman Act’s goals of reducing pri

ces and promotin

g competition, a

nd observing specifically that “‘[the

Act] rests on the

premise that t

he unrestrained inte

raction of competitive for

ces will yield the best allocation of our economic r

esources, the41

lowest prices, th

e highest quality a

nd the greatest m

aterial progress’ ” (quoting Northern Pacific R. Co. v. United States , 356 U.S. 1, 4-5, 78 S.Ct. 514, 5 17-518, 2 L.Ed.2d 545 (1958)

)); Monahan’s Marine, Inc. v. Boston Whaler, Inc. , 866 F.2d 525, 527 (1 stCir. 1989) (“ The Sherman

Act’s very

purpose is to help consum ers, in par t by bri ngin g abo ut lo w, non preda tory p rices .”). In deed, as the Supre me Court explained in Brooke Group : Even in an oligopolistic

market, whe

n a firm drops i

ts prices to a competitive le

vel to demonstra

te to a maveri

ck the unprofitabilit

y of straying from the group, it would be illogical to condemn the price cut: The antitrust l

aws then would be an

obstacle to the chai

n of events most conduc

ive to a breakdown of

oligopoly pricing a

nd the onset of competi

tion. Even if the ul

timate effe

ct of the cut is to induce or reestablish supracompetitive pricing, discouraging a price cut and forcing fir

ms to mainta

in supracompeti

tive prices, thus depri ving consu mers of

the be nefit s of lo wer pr ices i n the i nteri m, does not constit ute sound antitru st policy.

509 U.S. at 223-24 , 112 S. Ct. at 258 8. Similarly , we believe that

PM’s announcem

ent of its plan not to inc

rease prices on premium brands (and thus relinquish any basis for gaining market share that it enjoye

d as a result of Mar

lboro Friday) d

oes not tend to exclude the possibility of inde pendent behavior or to establish a pri ce fixing conspirac y. Indeed, this announc ement was a l egitimate com

munication with

in the market on

a day when an expl

anation for PM’s

unprecedented -- a

nd unquestionably42

competitive --

behavior plainly

was necessary . Contrary to the class’s alle gation that “[i]t s eems unusual for a manufactur

er of a consume

r good to conduct a pre ss conference to announ ce that it h as decided to engage i n retail co mpetition,” PM’s explanation of th e dramatic events of Marlbo ro Friday is by no means surprisin g. Thus, as the distri

ct court said, “

the allegation of Ma

rlboro Friday a

s ‘invitation to collude’ is not supported by the materials cited by [appellants].” Holiday Wholesale Grocery , 231 F . Supp . 2d at 1278 . More over, we not e that the Su preme Court’s caveat i

n Brooke Group

against discouraging c

ompetitive pric

ing behavior applies with equal f

orce to PM’s July

, 1993 price reduct

ions as it does to those instit uted on Marlbo ro Frid ay. To reiterate,

PM reinforced its

Marlboro Friday

actions by announc

ing on July 20, 1993 t hat it w ould s imilarly reduce the prices of all of its premium

brands and that it was consol

idating its discount and d eep-discount price tiers. In a

commensur

ately comp etitive response to P M’s actions, RJR

, B&W and Lori

llard - - which already h ad redu ced the ir premiu m prices i n respo nse to M arlbor o Frida y - - followed suit and consolidated their discount and deep-discount prices. This had the effect of fin

ally narrowin

g the premium

/discount price gap to a level PM found acceptable. Subs equently, on No vember 8, 1993 R

JR led a 4¢ per pack i

ncrease for both of these brand categories, which was promptly followed by PM, B&W12 This is so regardless of the particular means by which PM’s competitors could have

attempted to re-widen the price gap. For example, they c ould have tried to (1) raise premium prices while keeping discount prices constant or lowering them; (2) keep premium prices constant while lowering discount prices; or (3) lower premium prices and lower discount prices even further. We note, however, that the revenue crunch created by Marlboro Friday rendered the last two options l

ess feasible tha

n the first. 43 and Lorillard. The class argues that RJR and B&W -- which had been the primary beneficiaries of

the broader, pre -Marlboro Friday gap -- should have att

empted to re-widen the premium-discount price gap. By instead acquiescing in the prices imposed on the m

arket by PM, a

ppellants say, RJR and B&W signa led their acceptance of the

condition for a pric e increase establ ished by PM, i. e., that any such increase could not result in a widening of the gap. Notably, however,appellants do not specify precisely how RJR and B&W should have tried to rewiden the price gap ; that is, they d o not identify the particular com bination of premium price increases and/or discount price reductions that would have created a gap more favo rable from the perspecti ve of RJR an d B&W. 12 Moreo ver, R JR and B&W’s d ecisi ons t o acce pt th e narr ower p remiumdiscount price gap pr

eferred by P

M do not tend to exclude t he possibility of independent behavior or to establish a price fixing conspiracy. It is plain to us that RJR and B&W’s actions are readily explained as economicallyrational, selfinterested response s to Marlboro Friday . PM’s prem

ium price cuts s

trongly suggested to its com

petitors that any

attempt to gain m

arket share for di scount44

brands through furthe

r price cuts would n

ot be accepted. F or example, h ad RJR or B&W tried to cut its discount prices w hile raising prem

ium prices, a

s the class seems to argue

they should have,

PM would likely

(and readily)

have matched t

he lower discount pric es while simult aneously lower

ing its premium

prices, thereby unde rsell ing i ts comp etito rs in t he pre mium mark et and resto ring t he pre miumdiscount price gap to the level it desired. Thus, any such wholesale price competition by

RJR or B&W woul

d only have decre

ased industry re

venues across the board without inc

reasing their m

arket shares. T

he only viable wa

y for RJR and B&W to increase their revenues was to raise pric es in a manner t hat would not provoke a compe

titive response from

PM, which is prec

isely the action

that the class labels a signal

of conspiracy.Put simply, this action is no m

ore indicative of collusion than it is of lawful, rational pricing behavior. The class denotes a

s still another signal the statement b y Martin Brought

on that “[BAT] may be one of those who started t he price war in the U.S., but we have no wish to escal

ate it.” The ce

ntral problem w

ith this argument

, however, is that appellants have not fully represented what Broughton said. As the district court noted, the ful

l statement re

ads: “BAT m

ay be one of those

who started the price war in the U.S., but we hav e no wish to escalate it

. But we shall be rea dy to respond tactically where necessary .” Holiday Wholesale Grocery , 231 F. Supp. 2d13 Although the class argues that “[w]hether this statement, in conjunction with all the

other evidence

cited by Plai

ntiffs, permits the

inference that

Defendants ag

reed to fix prices i

s a question for the jury, not for the district court,” this contention is wrong in a number of respec ts. Firs t, t he s tan dard is n ot w het her B rou ghto n’s sta tem ent “per mit s th e in fere nce” of co nsp ira cy, but instead whether such an inference would be reasonable. In othe r words, we must ask whether this statement tend

s to exclude the possi

bility of inde

pendent behavior

or, conversely

, tends to establish a collusive price fixing arrangement. Second, this threshold question of the reasonableness of the inference to be drawn from the statement is a legal question that, under Matsushita, properly i

s addressed, at le

ast initially,

by the distric

t court. 45 at 1278 (emphasis added). As the court continued: “[T]he rest of the interview also notes that Mr. Bro ughton was ‘perplexed ’ by [PM’s] tactics and that BAT ‘will wait and see what happens in the market before playing its own cards.’ ” Id. The district court

concluded that when Broughton’s entire statement is considered, “[n]o reasonable jury co

uld infer that B&W

agreed to any pa

rticular future course of conduct . . . .” Id. We agree; Bro ughton’s statem

ent is at best am

biguous and, more realisti

cally, cuts ag

ainst a finding of coll

usion. 13 As explained supra , it is clear that further price re ductions of either the premium or

discount brands would h ave reduced B&W ’s revenues with out increasing its m

arket share. Br

oughton’s statem

ent simply r

ecognizes this economic fact

, nothing more.Indeed, it would ha ve been utterly

irrational for B&W to have rea

cted to the events of Marlboro Friday in any way other than to have matched P

M’s drastic price reduction (so as to retain its mar ket share) and46

then to attempt t

o raise prices aga

in (albeit slowly

and over time)

so as to regain some of its lost revenue

. The class also say

s that B&W and RJR

both “clarif[

ied] their agreement not to compete on price” by publicly announcing their future pricing intentions at meetings with s

tock analysts. It posits that B&W was the first to sig

nal, when on September 30,

1993, its CEO, T

homas Sandefur

, told stock analy

sts that “ourcompany fully intends to pursue options other than price for our V-F-M [valuefor-money, an industry term for discount] brands.” Notably, how ever, the class has not cited to the ful

l text of this statem

ent. Sandefur sa

id, in full, that: We believe that price cutting or discounting -- while still a factor -- will be less im

portant than in the pas

t. That’s beca

use gaps in the list price have narrowed bet ween premium and V-F-M . . . brands. Premium brands, therefore, should regain some strength. O ver time, smaller price

increases coupled w

ith state and feder

al tax increases, will bring premium prices up once again. This will make V -F-M brands more app ealing. But in the ne ar term, va

lue-for-mone

y brands will need to compete on so me basis other than price. And ourcompany fully intends to pursue options other than price for our V-FM brands

. Holiday Wholesale Grocery , 231 F. Supp. 2d at 127 9 (emphasis in original ). Sandefur’s com

plete stateme

nt simply doe s not tend to exclude the possibility that B&

W’s pricing de

cisions were rea

ched independently

(or to establ ish a pr ice fix ing con spirac y). Indee d, when c onsid ered in its ent irety,47

Sandefur’s statement clearly “ explains that with Philip Morris narrowing the price gap and forcing a retu rn to strength for p remium brands, ‘in the near term,’ discount brands would ha ve to come up wi

th another way

to compete. T

his statement is anything but a commitm ent to abandon price competition, as [appellants] all

ege. It is, in fa

ct, a declaratio

n of an intent to do so if

and when the prices of premium brands are increased.” Holiday Wholesale Grocery , 231 F. Supp. 2d at 1279. The class next alle

ges that RJR sim

ilarly signaled

its intent to refra

in from price competi

tion in a Novembe

r 2, 1993 statem

ent by Charles H

arper, the CEO

of RJR/Nabisco, RJR’s parent company. Howe ver, Harper said no more than that RJR was going to focu

s on earnings growth a

nd was “willin

g to accept mode st market share

losses as the cost of i

mproving earnings.” We cannot r easonably infer collusive price fixing from th is brief comm

ent. This genera

l statement, l

ike so many of th

ose on which appella

nts focus, plainly

is a rational respon

se to the economic incen

tives created by

PM on Marlboro Frid

ay, and does not t

end to exclude the possibility

that RJR acted inde

pendently or to es

tablish a price fixi

ng conspi racy. The class claim

s additionally tha

t PM signaled the acceptability of i ts competitors’ overtures at elim inating price com

petition by announc

ing its48

permanent allocation program, which typically had been associated with an impending price increase. Appellants say that this action actually was an acknowledgment by PM of its competitors’ announcem ents that they had abandoned price com

petition. Like the

other actions on whic

h the class focuses, however, PM’ s adoption of a perm anent allocation program does not ten d to exclude the possibility

that PM acted indepe

ndently or to esta

blish a price fixing conspiracy. T

his is so for at least

two independent rea

sons: “First, [PM] had no idea that its com

petitors would reac

t to a price increa

se and, to that end,

had a competitive contingency plan.” Holiday Wholesale Grocery , 231 F. Supp. 2d at 1280. Indeed, as the district court noted, “[t]here is nothing to suggest that [PM was] responding to

RJR’s willingnes s to move to a prof itability mode except the temporal proximity of the two announcements.” Id. Second, as we w ill discuss in greater detail, infra , the allocation programs were viewed by appellees as necessary to combat trade loa ding by wholesale

rs, which resulte

d in excess product returns, di sruptions in shipping patte rns and stale product . When these factors are considered, the district court was correct to say that the mere f act that PM instituted a perm

anent allocation program cannot give rise to a reasonabl

e inferen ce of con spirac y.49

Finally, the c

lass posits that appell

ees’ signaling re

ached a peak on November 8, 1993, when RJR incr eased wholesale pr

ices in equal am

ounts for both the p remium and disc ount pric e tiers. It co ntends th at it was in RJR’s economic interest to attempt to widen the price gap, yet it did not do so. However, RJR’s actions do not

tend to exclude the pos sibility of indepe ndent behavior or to establish a price f

ixing conspiracy.

Indeed, appellant

s’ allegation has s

tood economic real

ity on its head. A

s explained supra , it would have been in the interests of RJR an

d B&W to widen the

gap between the pre

mium and dis count price points only if

doing so would hav e generated market share or pr ofitability. Yet because they

knew as a result of

Marlboro Friday

that PM would not readily accept such a stra

tegy, and that a

ny effort to re-widen the price g ap ultimately would have further depressed industry revenues without increasing their market share s, eco nomic s elf-i ntere st di ctate d that they ra ise pr emium and discount prices as much as they

could. Again, w

e cannot say tha

t these pricing decis

ions tend to exclude the possibility

of independent actio

n on the part of appell

ees or to establish that th e manufacturers colluded to fix prices. None of the actions taken by PM, RJR or B&W that appellants label “signals” tend to exclude the possibility that the primary players in the tobacco industry were engaged in rational, lawful, parallel pricing behavior that is typical50

of an oligopoly. N

or, conversely

, do they tend to e stablish that a price fixing conspiracy was afoot. Notably, this conclusion does not change when we consider these actions cum

ulatively. In o

ther words, in this

case the whole of t

he manufacturer

s’ actions is no gre

ater than the sum

of its parts. Because none of appellees’ larg

ely ambiguou

s statements an

d actions come c

lose to meeting t

he mark, it is unhe

lpful to the class to consider those actions i n concert.

b. Actions Against the Manufacturers’ Economic Inte rests It is firmly

established that act

ions that are contra

ry to an actor’ s economic interest c onstitut e a plus fact or that is s ufficient to satisfy a p rice fixin g plainti ff’s burden in opposi ng a summary judgment motion. See Harcros , 158 F.3d at 572 (“One prom

inent ‘plus factor

,’ to which anti

trust plaintiffs oft

en take recourse,

is a showing that the defendants’ behavior would not be reasonable or explicable (i.e. not in their legitim

ate economic s elf-interest) if they were not conspiring to fix prices or otherwi se restrain trade -- that is, that the

defendants would not h

ave acted as they di

d had they not been

conspiring in restra

int of trade.” (c

iting Theatre Enters ., Inc. v. Pa ramount Film

Distrib. Corp.

, 346 U.S. 537, 540-

42, 74 S. Ct. 257, 259-60, 98 L. Ed. 2 73 (1954))).51

However, we m

ust exercise pruden

ce in labeling a given

action as being contrary to the

actor’s econom

ic interests, lest

we be too quick to second-guess well-intentioned business judgments of a ll kinds. See In re Citric Aci d Litig. , 191 F.3d at 1101 (“Courts have recogniz ed that firms m

ust have broad discre

tion to make decisions b ased on their judgm ents of what is best f

or them and that

business judgments should not be second-guessed even where the evi dence concerning the rationality of the chall enged activities migh t be subject to reason able dispute.”). Accordingly,

appellants must show more than t hat a particular a

ction did not ulti mately w ork to a manuf actur er’s fi nanci al adv antag e. Ins tead, in th e terms employed by Matsushita , the action mu st “tend[] to

exclude the possibilit

y of independent action. ” Thus, if a benign explanation for the a

ction is equally or more plausible than a collusive expla nation, the action cannot constitute a plus factor. Equipo ise is n ot enou gh to ta ke the c ase to t he jury. The district court

identified 7 actions taken by PM, R JR, B&W and/or Lorillard that the

class said were contrary to the a ctor’s econom

ic interest: (1) non-initiating D efendants alway s followed price in

creases; (2) after Marlboro F

riday, B&W

and RJR turned awa

y from discount cigarettes; (3) R

JR led, and Philip Mo

rris followed, a

price increase despite planning docum

ents which reflec

ted they would not

take increases ; (4) each Def endant exc hanged in formation th rough [MSA]; (5) each Defend

ant had permane

nt allocation progra

ms; (6) Philip Morris based settle

ment paym

ents on market capitalization and not14 This sixth factor was addressed briefly and quickly r ejected as a plus factor by the district court. I

n sum, the class ar

gued that: Major tort cases against [appellees] were settled in 1997. The shares of the initial payment (equal to abo ut 1% of the total settlement) were computed on the companies’ share of total market capitalization. Subsequent annual payments were allocated based on market share. [Appellants] argue that it was against the

economic self-interest

of Philip Morris to agree that the up-front payments be based on market capitalization rather than market share. Holiday Wholesale Grocery

, 231 F. Supp. 2d at 1 304. The court simply held that “[t]here is no evi dence that Philip Morris could have settled on a more favorable basis at that time” and tha t appellants’ “thesis [faile

d to] t ake into account all the known facts,” and consequently that PM’s actions “fail[ed] to create an inference of any sort.” Id. Not only does the class not chal

lenge these conclusions,

but also there does not appear to be an y viable grounds on which they could be contested. 52 market share; and (7) Defendants agreed to pay “ excessive” settlement price increases

. Holiday Wholesale Grocery , 231 F. Supp. 2d at

1296. With the exception of the sixth, 14 appellants contest th e district court’ s rejection of ea ch action as a plus factor. Simply put, we find each of th e class’s arguments to be un persuasive. None of the actions o

n which appellants f

ocus tends to exclude th

e possibility of independent behavior (or tends to establish a price fixing conspi

racy), and accordingly they do not co nstitute plus fact ors. Preliminarily, we already have explained why the district court was correct to reject as a plu

s factor the decisi

ons by RJR, B&W

and, in some ca

ses, PM to follow a price inc

rease initiated by

one of their com

petitors. Sim

ply put,53

“[t]estim ony and contem

poraneous docume

nts show that RJR, B &W, and Lorillard found their options extremely limited after [PM’ s] Marlboro Friday announcement.” Holiday Wholesale Grocery, 231 F. Supp. 2d at 1297. In the case of RJR and B&

W, they coul

d have (indeed, the

class suggests they

should have) continued to focus on widening the premium-discount price gap. However, given PM’s unambiguous message on Marlboro Friday that it would act aggressively to a

ttempt to ma

intain its desired pr

ice differential , this likely w ould have resulted in litt

le if any m

arket share gain. It simultaneous ly would have minimized profits, given th at lower prices generate smaller revenues. Moreover, lower

ing wholesale price s likely would hav e been an ineffec

tive means of incre

asing market sha

re, as price cuts

are unlikely to b e passed on by the wholesaler to the r

etailer or by t

he retailer to the consumer. T hus, appellees’ only viable route back to p

rofitability w

as to increase prices; that they did so in a parallel mann

er does not establish c

ollusion. Because t

he decisions to follow price increases were in the economic interests of RJR and B&W, these actions are not plus factors. Nor can the lack of

analysis that pr

eceded the decisions

to match each s

uch individual increase be construed as evidence of collusion. Once appellees perceived that ra

ising prices was the

ir wisest econom

ic strategy, n

o extensive54

discussion or planning was needed to implement this strategy each time a competitor initi

ated a price incre

ase. As the distri

ct court put it in discu

ssing RJR: “Once RJR determin ed what its str ategic respon se woul d be to M arlbor o Frida y, there was no need t

o re-complete

that evaluation eac

h time RJR need

ed to decide whether to respond to a price increase.” Holiday Wholesale Grocery, 231 F. Supp. 2d at 1298. As for appellants’ claims that RJR and B&W acted a

gainst their intere sts by deciding to turn awa

y from the

discount market

that had been so profi

table for them prior to Ma

rlboro Friday,

there are two sim

ple answers. Fir

st, it is evident that RJR and B&W

did not stop focusing on its discount brands, but si

mply changed tactics wi

th respect to them. Specifically , instead of continui

ng with wholesale

list price competition, RJR and B&W began competing at the retail level, where they could be certain that savings would accrue to the consumer, that is, would not be swa

llowed by the w

holesalers or reta

ilers. Second, t

o the extent that RJR or B&W did shift any foc us away from

their discount brands,

doing so plainly was in their int erests. Although the class cites a statement by Gary Black for the proposition that “‘analy sts expected’ and

it was ‘well r

ecognized’ that R

JR and B&W should continue to pursue the discount market,” Holiday Wholesale Grocery , 231 F.55

Supp. 2d at 1300, these “expectations” were not empirically supported. Marlboro Friday render

ed the discount and dee

p discount marke

ts less profitable.Both RJR and B&W learne

d that if they “

continued to pursue discount prices downwar d, Philip Morris could respond in the same manner it did on Marlboro Friday.” Id. at 1301. What’s m

ore, the profit m

argins on the prem

ium brands m

ade by RJR (Camel and Winston) and B&W (Barclay , Capri, Lucky Strike, etc.) were lar ger than those associ ated with these manufactur ers’ discount brands , see id. at 1301 n.33 (discussing “

the lower profit m

argins” associated

with discount brands) , and the post-Marlboro Friday narrowing of the premium/discount price gap rendered the discount brands les s attractive to cons umers. These factors cem ented the wisdom of RJR and B&W’s decisions to shift the focus away from gaining market share for their discount brands and towa rd increasing profi

tability by concentrating on, an d increasing prices of, the premiums. Similarly unpersuasive are th

e class’s argum

ents concerning subse

quent decisions by PM and RJR to initiate price increases despite internal analyses that such increases we

re not advisable. A

s the district court r

ecounted in the contex

t of RJR’s decision to l

ead a May, 199 5 increase, the in ternal doubts concer

ning the wisdom of these raises were undergirded by an uncertainty as to whether they would be followed,

not whether they

would be econom

ically benefic

ial if15 To the extent that the class argues that PM’s decision to follow the May, 1995 price

increase was contrary to its own pricing plans, this arg ument is based on a mischaracterization of the comments of PM’s CEO. According to appellants, the CEO said that “[w]e plan no price increase in 1995.” However, what the CEO actually said is “[w]e plan no price incr ease in 1995. . . . If the com

petitive environme

nt changes sig

nificantly,

however, we will

respond immediate

ly 56 followed. See Holiday Wholesale Grocery , 231 F. Supp. 2d at 1303 (“[W] hile it is true that internal RJR staff recommended against raising prices, that recommendation was made because it wa s ‘doubtful’ whether the other companies would follow RJR’ s price increase, a concern that beli

es [appellants’]allegation of price fixing. None

theless, RJR’s C

EO Jim Johnston d

ecided in the spring of

1995 to increase price s in order to determ ine whether its com

petitors would do the same.”). Indeed, in 1995 the industry was still feeling the loss in revenues that resulted from the sharp price reductions spawned by Marlboro Friday, and as Professor Fisher

explicitly recognized, “RJR was under consider

able pressure in 1995 to improve its pr ofits,” as was PM. Id. Simply put, the increases that were in the interests of e

ach manufactu

rer had to be initiat

ed by someone , and it made good economic sen

se for the industry ’s two largest pl ayers, PM an

d RJR, to be the ones to have done so. T

hus, the decisions to l

ead these increase s are significantly more consistent

with the econom

ic interests of PM a

nd RJR than they a

re with the conspiracy theo

ry advanced by

the class. 15and appropriately.” Thus, as the district court noted, PM “did not say under any circumstances would it not raise prices in 1995; it left open the need to respond to competitors’ actions.” Holiday Wholesale Grocery , 231 F. Supp. 2d at 1303.

57 Appellants next raise two arguments related to the exchange by each appellee of wholesale-to-retail sales information through Management Science Associates. Ar

ound 1993-94, PM devel oped with MSA a sy

stem for trac

king wholesale to reta

il shipments of it

s products, which it

believed would aff

ord it a great competitive advantage. Subsequently, in 1995, PM permitted MSA to share this service with its competitors. In exchange for their acceptance of the service, RJR, B&W and Lorillard agreed to share their own sale s information. Appellants first a

rgue that PM’s de

cision to share this se

rvice cannot be seen as being in its economic interest , and instead m

ust be viewed as a m

eans of facilitating the monitoring of the conspiracy by all of the conspirators. PM responds that by sh

aring the MSA ser

vice it shifted the f

inancial burden of gathering sales and m

arket share data f

or its competito

rs to RJR, B&W and Lorillard, and th

at as a result it ac

tually realize

d an annual savings of m illions of dollars. Viewed in the light most favorable to appellants, both explanations are plausible, and thus,

at the most, th

is action by PM st

ands in equipoise; that is, it is equall y consis tent wi th coll usion as with lawful c ompetit ion, an d accor dingl y, under Matsushita

and Harcros , it cannot repres ent a plus factor. Second,58

appellants argue tha

t the participation by

all appellees in the

MSA data sharing system was contrary to their respecti ve interests. Preliminarily (and quite significantly), we note that the evidence establishes that appellees exch anged only sales, not pricing , information through M SA. Simply put, it is far less indicative of a price fixing conspiracy to e xchange information relating to sales as opposed to prices. Moreover, it plainly was economically

beneficial for ea

ch individual appellee

to keep tabs on the

commerc ial activities of it

s competitors,

so the receipt of inf

ormation conce

rning their sales does not t

end to exclude the possi

bility of independ

ent action or to establish anticompetitive collusion. Indeed, as RJR argues, “[e]ven if one assume s that, all else bein

g equal, RJR would p

refer that data a

bout its products not be available to its riva

ls . . ., that doe s not tell us that RJR a cts irrationally

if it concludes that the co

mpetitive benef

it of obtaining its riva

ls’ data outweigh

s whatever preference it has against sharing its own data.” Thus, although the sha

ring of informa

tion can be seen as sug

gesting conspiracy, a

s appellants allege,

it also can be seen e

qually as a nece ssary mea ns to the receipt of its competitors’ information. If a particular m anufacturer ceased providing its own infor

mation, its ent

itlement to that

of its competito

rs would similarly end. To draw an analogy, each co mpany’s willingness to give its own16 Although Lorillard implemented its program prior to the alleged inception of the

conspiracy, RJR did so in September, 1993; B&W in October, 1993; and PM in November, 1993. 59 information ca

n be viewed as the a

nte in a poker gam

e. To ante is irr

ational only if there is no legitim

ate reason why

one would be play

ing the game; y

et here, the game is oligopolis

tic competition,

which everyone

concedes is lawful , and the ante is perfectly consonant with the desir e to play. For

both of these reasons , the delivery of wholesale-to -retail sales information to MSA does not tend to exclude the possibility of independent action (o r tend to establish a p

rice fixing conspiracy), and thus can not constitute a p lus factor. Nor we re the manufa cture rs’ ad opti on of p ermane nt all ocati on pro grams 16 contrary to the

ir economic int

erests. Thus, th

e adoption of these sy

stems does not tend to exclude the poss

ibility of lawf

ul, independent beha

vior, does not tend to establish a price f

ixing conspiracy,

and cannot constitute a plus factor. It is

uncontro verted tha t during “th e late 1980 s and early 19 90s, [the man ufacturers ’] direct customers engaged in ‘trade loading,’ a practice whereby the direct customers woul

d purchase an am

ount of cigarettes i

n excess of what the

y could sell either (1) in a

nticipation of expec

ted list price incre

ases or (2) in respo

nse to end-of-quarter or

end-of-year

manufacture

r discounts and incenti

ves. [The class] admits that [ap

pellees] experi

enced increased costs due to trade loadi ng because60

that practice wou

ld distort sales resu

lts and cause excess

product returns, disruptions in shipping patterns, and stale product.” Holiday Wholesale Grocery, 231 F. Supp. 2d at 1284. By implementing the allocation programs, a ppellees were able to elim

inate this costly

practice, and,

the district court f

ound, contemporaneous documents demonstrate conclusively that this was the actual motivation for the prog rams. See id. at 1284-85. It is cle ar that the adoption by appellees of perm

anent allocation programs was in th eir respective int

erests. In addition, the evidence establishes that allocations were increased in cases where a particul

ar wholesaler de

monstrated a ge

nuine need for m

ore product, for example wher

e it took on a new ret

ail customer.Although appellants a ttempt to point to specific instances in which wholesalers were unable to procure such increases, we agree with the district court that the refusal to increase a particular allocation generally occurred only where the demand for m ore product stemmed from the perception that a price i ncrease was im

minent, prec

isely the phenom

enon that the systems were designed to eliminate. In sum marizing its findings, the court found that “whil

e it is clear the w

holesalers did not like

the allocation sy

stem, the testimony pr

esented by [the class] is either ambiguous or show

s the opposite of what [it] conte

nd[s]. As such,

no reasonable infer

ence could be draw

n from [the17 RJR, B&W and Lor illard matched PM’ s increases.

61 class’s] evidence that [the manufacturers] used the allocation system to restrict output.” Id. at 1287. Finally, the c

lass claims tha

t the price increa

ses that followed the

settlement of several healthcare lawsuits with various state Attor

neys General

were excessive -- the largest occ

urred on Novem

ber 23, 1998, when PM raised its list pr ices by $22.50 per thousand --

and contrary to

appellees’ 17 (or at least PM’ s) economic interests. Specifical ly, it says that “PM knew that the larg e increases . . . benefitted RJR and B &W more tha n PM. PM had the fi

nancial ability

to take smaller price increases that only offset settlement costs, and had it done so, PM would have benefitted, and RJR and B&W would have lost market share.” Appellants even ques

tion whether PM nee

ded to increase its p

rices at all follow

ing the settlement . By contrast, they stress that

regardless of PM’ s pricing decision, RJR and B&W we

re forced to raise

prices to meet

the financial obliga

tions imposed by the settlement. Accordingly, they posit that by not raising prices following the settlement, or at least limiting the amount of its price increase, PM could have undersold its competitors, thereby gaining market share.62

However, this a

rgument fails b ecause it unfairly constricts the range

of PM’s possible competitive responses to the heal

thcare settlem

ent. PM could have attempted to increase its profits by either of two means: instituting a smaller price increa se in an effort t o gain ma rket sh are from i ts compe titors or, more d irectl y, simply incr

easing prices to the maximum extent the mar

ket would bear. T

he class’s argum

ent is predicated on t

he notion that only t

he first was econo

mically advantageous for PM . Nowhere does i t explain why thi s should be so, and it disregards the fac

t that the second wa

s likely a m

ore direct me

ans of accomplishing the same end. Indeed, given that t

he need for a signif

icant price incre

ase was a product of a sudden and sizable cash outflow, PM ca n readily point to sound economic reasons for taking t he most surefire, direct rou te to the recoupment of it s losses. Instead of attempting to recover its losses through market share gains, which would have require

d a shift in consum

ers’ brand loy

alties -- which,

although not immutable , are not evanesc ent either -- PM i nstead chose to direc

tly replenish its coffers by increasing its prices. This plainly was no t an uncompetitive deci sion. As such, the extent

of PM’s post-sett

lement price r

aises does not tend to e

xclude the possibility of independent behavior among appellee s or to establish a col lusive price fixing arrangement, and consequently is not a plus factor.63

c. Monitoring of Sales through MSA Previously, we indicated that the district court correctly concluded that appellees’ provi sion of sales and pric ing information t

o MSA was not a plus factor. However, the class rai ses a separate argument relat ed to this monitoring

. In particular, it says that “MSA solicited and received each [appellee’ s] approval for the modification of its service s and the introduction of new services and specifically c

onditioned them on [appellees’] u nanimous approva

l,” and that this concerted behavior tends to exclude th e possibility of ind ependent action. The district court rejected this argument, observing that appellants had “offer[ed] no support for their contention that each modification to the service provided by MSA . . . was made wit h the ‘joint agreement of a ll [appell ees].’ Rather, the docum

ents cited by Pla

intiffs show that MS

A . . . discussed

various proposals with each

company indi

vidually and m

ade modificat

ions to their services based on . . . MSA’s . . . views about w hat would be the m

ost acceptable to their custome

rs. There is no e

vidence in the docum

ents cited by [a

ppellants] that any of [appellees] negotiated together or reached any agreem ent together about what services they would request from MSA . . . . ” Holiday Whol esale Grocery , 231 F. Supp. 2d at 129 5 n.29.64

On appeal, appellants fail to demonstrate how this conclusion was erroneous. Moreover, even if the class could show that on some occasions PM, RJR, B&W and Lorillard each agreed to a modification to the service before that change was instituted, this does not tend to establish the existence of a conspiracy any more th

an it reflects tha

t each individual subsc

riber to the joint d

ata provision system made its decision based on an individualized calculus. To the extent that appellants argue tha

t the very join

t nature of this sy

stem gives rise

to a reasonable inference of collusion, we already have discussed the practical and financial advantages that stem

from the abili

ty to monitor

the sales of one’ s competitors a nd from the sprea

ding of the responsibili

ty for providing m

arket share and pr

icing data to those com

petitors. This leaves only the following alleged plus factors that the district court deemed unworthy of extended d iscussion.

d. Smoking and Health Conspiracy Appellants say that beginning in 1953, P M, RJR and B&W

conspired to restrict comp etition on the basis of h ealth. They assert that this agr eement remained effective throughout the alleged conspiracy and that it evidences appellees’ agre

ement to fix pri

ces. As the m

anufacturers note , however, Pro fessor65

Fisher conceded tha

t there is no evidence

that these activitie s continued to transpire during t he period in quest ion, i.e., 1993-2000

. Fisher opined as foll

ows:

It is en tirely possiblethat firms’ decisions to limit healthbased marketing in the past continued to be felt between 1993 and 2000. Such dec isions may

have checked companies’ i

ncentives to vigorously

pursue healthrelated research. To the extent that health-related innovations were re

tarded as a result,

cigarettes would have exhibited a higher degree of homogeneity between 1993 and 2000 th an they would have otherwi se. Similarly , firms lim

ited their health-ba

sed advertising in the early to m

id 1990s, which may have served to maintain perceived homogeneity. As explained above, greater homogeneity facilita tes coordination on price. Thus to the extent

that firms’ decisions resulted in greater homoge

neity between 1993 and 2000, it would have facilitated coordin ation on price in th ose years. Holiday Wholesale Grocery , 231 F. Supp. 2d at 131 1 (emphasis in original ). In essence, for a

jury to infer

from this evide

nce that appellees c

ollusively fixed prices during t

he 1990s, it would have

to engage in propensity

reasoning, i.e., “the y did it 40 yea

rs before so they

probably did it aga

in,” albeit now w

ith Lorillard on board a

nd with the object o f the conspiracy being prices as oppose

d to health. In other w

ords, “[i] n order to draw an i nference of conspi

racy [from

] this testimony,

a jury would h

ave to engage in such s

peculation that its f

inding would66

be a ‘guess or mere possibility.’” Id. Moreover, Fisher’s opinion itself is stated only in term

s of theoretical poss

ibility, hardly

the stuff of proof th

at tends to exclude lawful, synchron ous behavior. The “smok

ing and health conspira

cy” does not tend t

o exclude the possibility that ap

pellees were eng

aged in lawful, competitive pric ing behavior or to establish a pric e fixing conspiracy, and cannot constitut e a plus factor. See Matsushita , 475 U.S. at 595 , 106 S. Ct. at 136 0 (dismissing arg uments against granting summ

ary judgm

ent in favor of antit

rust defendants whe

re “where t

he evidence of conspira

cy is speculativ

e”); see also Eastman Kodak , 504 U.S. at 468

- 69, 112 S. Ct. at 2083 (reaffirming the Matsushita standard, and noting specifically t

hat evidence of pre

datory pricing t

hat is “‘spec

ulative,’ and [i s] not ‘reasonable’” is insufficient to withstand an antitrust defendant’s summary judgment m

otion); SEC v. Aleja

ndro Duclaud Gonza

lez de Castilla, 184 F. Supp. 2d 365, 376 (S.D.N.Y. 2002) (“While in a m otion for summary judgme nt every inference based upon an established fact must be drawn against . . . movants, as juries are regularly advised , speculation canno t substitute for p roof.”).

e. Foreign Conspiracies67

The class also sugge sts that appellees conspired to fix price s in 10 different foreign countries dur

ing and prior to the all

eged American conspiracy a round which this lawsuit centers. The distr ict court found that e

vidence of the manufacturer

s’ actions in these

countries was not a

dmissible under F ed. R. Evid. 404(b) (other crimes, wrongs or acts) because appellants had failed to show that any of the actions allegedly undertaken by appellees overseas were illegal under the applicable foreign law. It summarized its disposition of the foreign conspiracy claim by sa

ying that: [Appellants] [] assert that they have “extensive

evidence of anticompetitive activity” by [appellees] in Hungary , France, Argentina, Venezuela, and Panama. [Appellants] fa il, however, to address the court’s previous ruling that “price-fixing agreements were not at all times unlawful under the laws” of thes e countries. Furthermore , [appellants] baldly contend tha t [appellees],

or their affiliates, unde

rtook anticompe

titive price fixing a

greements in Canada, Costa Rica, El Salvador, Guatemala,

and Saudi Arabia (

Gulf States). Nowhe

re do [appellants] describe the legal landscape in these countries that

would make any

such activities unlaw

ful, nor do [they] do any

more than cite

to documents in de scribing the nature o f these alleged anticompetitive activities. This is simply too thin a reed upon which to allege t

hat [the manuf

acturers’] “foreign conspi racies” are a “plus fa

ctor” in the instant l

itigation. Holiday Wholesale Grocery , 231 F. Supp. 2d at 131 2. On appeal, the cl

ass cites Professo

r Fisher’s testi

mony for the

proposition that regardless of

the legality of the manufactur ers’ activities

in these countries,18 It is not perfectly clear whether the remaining factors addressed by the class ar e offered as plus factors or merely as evidence that the pricing de cisions made by the manufacturers during the 1990s were not independent. Regardless, none of them constitute plus factors or are especially probative of collusive behavior. 68 the foreign agreem

ents provided a m

echanism to “

establish and revise , and to monitor and enfo

rce agreeme

nts to coordinate.”

Appellants say

that a reasonable jury could infe

r the existence of s

uch an American conspiracy f rom these alle

gedly anticompetitive activ ities abroad. To begin with, we

cannot say the di strict court abused i ts discretion in resolving this evidentiary question. In the absence of some palpable tie between these overseas act

ivities and appellee s’ pricing actions in the United State s, the foreign undertakings

of PM, RJR, B&W

and Lorillard do not tend to exclude the possibility of inde

pendent action in the s etting of domesti c cigarette prices any more than does th

e health conspiracy

that allegedly b egan during the 1950s. Nor does the evidence re

adily establish a

prior crime,

wrong or act wher

e appellants ultimately

have failed to esta

blish that the foreign

conduct was a crim

e or wrong under the laws of the fo reign sovereigns. See generally Fed. R. Evid. 404(b). Accordingly, appellants’ alleged evidence of foreign agreements to collude does not rise to the level of a plus factor.

f. History and Structure of the Tobacco Industry 1869

First, appellants say that the stru cture of the tobacco industry is conduc ive to price fixing agre

ements because

of a concentration of sellers, inela stic demand at comp etiti ve pri ces, h igh b arrie rs to e ntry, a fungi ble pr oduc t, pri ncip al fir ms selling at the same level in the chain of distribution, prices that can be changed quickly, cooper

ative practices a

nd a record of antit

rust violations. In s

upport of the contention that this industry structure constitutes a plus factor, the class cites In re High Fructos e Corn Syrup A ntitrust Litig. , 295 F.3d 651, 655 (7 th Cir. 2002). The problem with this argument, however, is that the m ajority of the market characteristics on which the class focuses are simply indicia that the tobacco industry is an oligo poly, which is perfectly legal. See generally Harcros , 158 F.3d at 570-71. Moreover

, as Judge Posner r

ecognized in In re High Fructose Corn Syrup , “almost

any marke

t can be cartelize

d if the law perm

its sellers to establ

ish formal, over

t mechanism

s for colluding, such

as exclusive sales a

gencies.” 295 F.3d at 655. As for the industry’s history of antitrust violations, the district court noted that the class had fa

iled to direct it to a

ny precedent f

or holding such to be indicative of a prese nt antitrust vio lation. See Holiday Wholesale Grocery , 231 F. Supp. 2d at 1305 (“The law generally disfavors use of such ‘historical’ evidence.”) (citations omitted). App ellants have failed to do so on appeal as well.70

g. Dampening of M

arket Share Shif

ts Appellants next say that the shifts in the market shares enjoyed by eac h appellee moder

ated during the period of the alleged consp iracy, thus ind

icating that the collusion had i

ts intended effect

, i.e., bringin

g stability to a m

ost turbulent industry. The

y appear to cla

im that this is a plus factor. The class raises this argument in response to the district court’s focus on the fact that there were significant ma

rket share shifts be

tween 1993 and 2000, w

hich it deemed a

strong indication of competitive behavior. Appellants’ contention is misplaced, however, because (1) as the

district court noted,

these shifts rem

ained sizable betw

een 1993 and 2000 ; and (2) it is bey ond debate that no rea

sonable jury could infer from the fact that significa

nt market shar

e swings did not cease

but instead were onl

y somewhat smaller during the period in question than those that occurred between 1991 and 1993 th at appellees consp ired to fix prices. Indeed, from

1993 to 2000 PM’s shar

e of the United Sta

tes market ros e 20%, Lorillard’ s share rose nearl y 50%, RJR’ s share fell approxi mately 25%

and B& W’s share declined roughly 19%. These sharp m arket share shifts were at least as great as t

hose that occurred b etween 1980 and 1991, an unquestionably competitive per

iod -- to reiterat

e, RJR lost twice

as much ma

rket share from

1993 to 2000 as it did from

1982-1991 -- and plainl

y are inconsiste

nt with a price fixi

ng71

conspiracy. See generally Brooke Group , 509 U.S. at 212 -18, 113 S. Ct. a t 2582- 85 (describing the co

mpetitiveness a

nd market shar

e shifts that chara

cterized the American ci

garette mark

et during the 1980s). Moreover, to the e xtent that the class argues m

erely that the degree of these shif ts is probative of a conspiracy (but does not rise to the le

vel of a plus factor

), this contention is vastly less com pelling than is its inverse, namely that the very fact that there wer e significant market share shifts during th

is period of alleged industry-wide c ollusion strongly undermines appe

llants’ conspirac

y allegations.

h. “Credit Mem

os” Made Price In

creases Prospect

ive The class argues that appellees’ “price increase announcements wer e accompanied by

‘credit me

mos’ so that th

e price increase s were effecti vely delayed for several weeks. This in effect allowed the [appellee] initiating the price increase to ‘offer’ it to the other [appellees] before it becam e effective, to ensure that it met wit

h all [appellees’ ] approval.” T he district court squa

rely rejec ted this argument beca

use the class provide

d no evidence that the c

redit mem

os actually had this effect. It held: “The only testimo ny [appellants] cite for their con tention that credit me

mos delaye

d price increases

fails to support this a

ssertion. [Appellants] as sert that Carl Sc hoenbachler, for

mer Chief Fi

nancial Officer

of19 The testimony in question reads a

s follows: Q: So, would I be correct, then, that one of the re asons for sending out the Telex price increase

sooner rather than later is to let the trade know that there is some period of time

until the effective date, and during that -- during which they have the opportunity to purchase a t the old price?

. . . . . A: No, that’s not what I said. The practice -- more recent prac tice has been, when a Telex is sent out, the Tele x states that the pric

e increase is

effective immediate ly. All g oods ordered on Monday morning will carry the new price; you will be given a credit on a notional qu antity th at you purchased over the past si x months on average, th e average week’s shipments over the past six months. So, there’s no opportunity for the trade to order at the old price over some period of time. Holiday Wholesale Grocery , 231 F. Supp. 2d at 1274 n.11.

72 B&W, testified that the credit memos delay ed the impact of the price increase for a week or more. . . . [H ]owever, a more co mplete readi ng of Mr. Sch oenbachl er’s testimo ny shows that [a ppella nts’] mean ing can not be a ttribu ted to h is test imony. 19 . . . Furth ermore, [a ppelle es’] pric e annou ncements took effect immed iately, within one to two days of the announcement date.” Holiday Wholesale Grocery , 231 F. Supp. 2d at 1274

n.11. Because the

re is no evidence tha

t these credit

memos act

ually delay

ed the implem

entation of price inc

reases, appellan

ts’ argument that they constitute a plus factor necessarily fails, as does any r eliance they pla ce on th ese memos a s supp ort for their a llegat ion of c onspi racy.73

i. Opportunities to Consp ire and the Restric

tion of Decisionm

aking Authority to High-Ranking Corporate Officers The class posits that

PM, RJR, B&W

and Lorillard enj oyed numero us opportun ities to co nspire, an d that thi s support s their col lusion cl aim. We unambiguously

held in Todorov , however, that “the mere opportunity to conspire among antitrust d

efendants does not, standing alone, perm it the inference of conspiracy.”

921 F.2d at 1456 (citi

ng Bolt v. Halifax Hosp. Med. Ctr. , 891 F.2d 810, 827 (11 th Cir. 1990), overruled in part on o ther grounds by City of Colum bia v. Omni Outdoor Adver. , 499 U.S. 365, 111 S. Ct. 1344, 113 L. Ed. 2d 382 (1991)). Indeed, the opportunity to fix prices without any showing that appellees actually conspired does not tend

to exclude the possibil

ity that they

did not avail themselves of such opp ortunity or, conversely, that they actually did conspire

. Appellants may

not rely on this pr

oposition to support their allegations in this

case. Similarly

, we held in Harcros

that “memoranda showing that [an alleged conspirator] exercised strict control over chlorine pricing at Harcros support an inference that [t

hat individual] wa

s frustrated with h

is subordinates’ f

ailure to follow an innocuous allocation of responsibility as easily as they support an inference that H

arcros centraliz

ed pricing authority

in [the individual] in order to74

conceal the allege

d conspiracy fr

om other em

ployees.” 158 F .3d at 569. Such a showing cannot constit

ute a plus factor,

as it does not tend to ex

clude the possibility of inde pendent behavior or to establish a pri ce fixing conspirac y. Firms routinel

y consolidate dec

isionmaking author

ity in high ranking o fficers for a multitude of w

holly legitim

ate reasons. Sta

nding alone, this tell s us nothing about collusive price

fixing. As a final note, w

e observe that appel

lants have neglecte

d Lorillard in nearly all of their allegations, and agree with the district court that this repeated omission also “casts doubt on [appellants’] theory.” Holiday Wholesale Grocery , 231 F. Supp. 2d at 1315

. Thus, after thor

ough review of this case, we are sa tisfied that none of t

he actions on which ap pellants’ arguments are bas ed rise to the level o f plus factors. Nor do they const

itute plus factors w

hen considered in concert. Indeed, w hen all of appellees’ ac

tions are considere

d together, the cla

ss has established nothi

ng more than that t

he tobacco industry

is a classic oligopoly

, replete with consciously parallel pricing be

havior, and that its members a ct as such.

III75

Because the class has not carried its burden of demonstrating the existence of a plus factor, i

t is unnecessary

to reach the question

of whether the manufacturers are able to reb ut any inference that they con spired to fix prices

. Nonetheless, we

briefly discuss

the arguments a

ppellees raise in th

is connection, as we believe that

these showings also pow erfully establ

ish that the wholesal

ers’ allegations of col lusive price fixin g are economically untenable

. In general terms, PM, RJR, B&W and Lor illard argue that we must consider whether the conspiracy theory makes sense not as a general m atter, but rather against the backgr ound of the economic real ities of the 1990s cigarette market. When we do so, they continue, we should find that the class’s conspiracy theory makes no econom

ic sense. In parti

cular, they sa

y that as evidenced by a multi tude of contemporaneous documents (1) cigarette prices were lower and actually ro se more slowly

between 1993 and 2000 t han before and their

combined opera

ting income during the

alleged conspiracy

period never reac

hed pre-1993 levels; (2) appellees’ com

petitive spending at r

etail between 1993 a

nd 2000 (approxima

tely $25.256 billion) actually was much greater than the alleged list price overcharges to the wholesalers ($11.9 billion); and ( 3) market shar

es shifted dram

atically during the alleged pe

riod of collusion, w

ith clear “w

inners” and “los ers” emerging. A

ppellees say tha

t these consideratio

ns demonstrate t

hat all of the76

business decisions they

made during the period in question wer e motivated by strategic, com

petitive concerns a

nd reflect uncert

ainty regarding

various aspects of the market that is inconsistent with collusive behavior. The district court analyzed the manufacturers’ specific argum ents in support of their contentions,

agreed with each

of them and conc

luded that even if the

class had created an inferenc e of conspiracy, appellees had fully rebutted it. See Holiday Wholesale Grocery , 231 F. Supp. 2d at 1322-28. We agree. As for the indisputable fact that cigar ette prices were

lower during m

ost of the alleged period of collusion than they previously had been, the class says that this is a strawman, because these reduced prices were a direct product of Marlboro Friday, which induced the price fixing conspiracy. However, as the district court observed, appellee s “demonstr ated that prices ro se at a lesser rat e during the alleged conspiracy

period than during the period from 1988 to 1993, which [the class] contend[s] is a period of competitive pricing . . . .” Holiday Whol esale Grocery , 231 F. Supp. 2d at 1323. Had a price fixing arrangement actually been afoot -- that is, in th e absence of competition -induced pressure t o keep prices low - - the court reasoned, prices would have risen faster than if the manufacturers were competing with e

ach other. Sim

ply put, it does not

require an advance

d degree in economics to pre

dict that prices wi

ll rise more qui

ckly in the absence of77

competition than

in a competitive

environment. The district court did not err in concluding that this fa

ctor weighs me

aningfully again

st the economic viability of appell ants’ th eory. Perhaps even more significantly, the class concedes that appellees “increased retail promotional paym ents during the conspiracy.” Indeed, PM, RJR, B&W and Lorillard “spent a combined $25.256 billion on promotional allowances, coup ons and retail value a dded” between 1993 a

nd 2000, an amount that is more than doubl e the sum allegedly overcharg ed. Holiday Whol esale Grocery , 231 F. Supp. 2d at 1326. In 1999, for e

xample, PM a

lone spent nearly $2.9 billion (60% of i

ts operating incom

e) on retail prom

otions, couponing and its retailer incentiv

e program. M

oreover, we re

iterate that during 1998 competition within the industry was sufficiently pervasive that RJR, B&W and Lorillard brought a n antitru st and unfair competit ion suit a gainst PM b ased on PM’s adoption of a program that it called “Retail Leaders.” See R.J. Reynolds Tobacco Co. , 199 F. Supp. 2d at 365

. The district court

recognized, sim

ply and powerfu

lly, that if pr

ices are fixed, and market shar

e consequently is

unlikely to change

very much,

there is no rational reason to un

dertake extrem

ely significant

and expanding retail promotional expendi tures, which are a paradig matically competitive activity.78

Framed diffe

rently, it m

akes no sense for fi

rms that are f

ixing wholesale prices to then undermine the economic benefit of their collusion by spending more than twice the amo

unt of their allegedl

y illegal profit

s on retail comp etition. This seems beyon

d reasoned debate,

and thus the manuf

acturers’ siza

ble retail expend itures also un dermines the eco nomic vi abilit y of appe llants ’ theory. Finally, as f

or shifting mar

ket shares during the

period in question, th

is also is cont rary to th e notio n that a ppelle es were c onspi ring to fix pri ces. Spe cifical ly, from 1993 to 2000 PM’s s hare of the United Stat es market rose 20%, Lorill ard’s share rose nearly 50%, RJR’s share fell approximately 25% and B& W’s share declined roughly 19%. Contrary to the class’s contentions, these market shares are far from sta

ble. Moreover, it makes little sense to posit that RJR

and B&W would continue to parti cipate in a conspira cy that cut their market shares s o dramatically. Accordingly,

the economic c

ircumstances under which the price fixing agreement al

legedly transpir

ed, when consider

ed carefully,

strongly underm

ine the allegation of anticompetitive behavior. Simply stated, several of the actions taken by PM, RJR, B&W and Lorillard are wholly inexplicable if we assume that a price fixing arrangement had been reached. In sum, we believe the district court correctly con

cluded that even had a

ppellants demonst

rated the existence

of one or20 Appellants also argue that the district court erred by “dismissing” F isher’s testimony and conclusions regarding appellees’ adoption of permanent allocation progr ams as being contrary t o their economic i

nterests. To the e

xtent that the class u

ses “dismissing”

synony mously with “excluding,”

as in refusing to

admit Fisher’s te

stimony reg

arding the alloc

ation programs, we evaluate their contention infra

.

21 Specifically, the district court excluded Fisher’s testimony that appe llees’ alleged signaling was indicative of collusive price fixing, see Holiday Wholesale Grocery , 231 F. Supp. 2d at 1277; that their adoption o f permanent allocatio n programs wa s indicati ve of price fi xing, see id. at 1288; and that their exchange of information through MSA was part of a price fixing conspiracy, see id. at 1295-96. 79 more plus fact

ors -- and on this rec

ord they have not - - the manufac turers would have readily r

ebutted the resulting

inference of coll

usion.

IV Besides arguing that

the district court e

rred by reje

cting their argum

ents concerning plus fact

ors, the class fur

ther contends that the

court erroneously excluded the expert testimony of Professor Fishe r on some of these points

. Specifical ly, appellan ts say that t he distri ct court impr operly exclu ded Fisher ’s conclusion that the m

anufacturers enga

ged in activities bey

ond mere consci

ous paral lelis m, 20 which he expressed in the context of seve

ral of the particul

ar actions on which appellants ba

se their claim

s. 21 As we said in Harcros : Federal Rule of E

vidence 702, as expla

ined by the Supreme Court

in Daubert v. Merr

ell Dow Pharmaceuticals, Inc. , 509 U.S. 579, 589, 113 S. Ct. 2786, 2794-95, 125 L.Ed. 2d 469 (1993), a nd its80 progeny, contr

ols determinat

ions regarding the admissibility of expert testimony. Expert testim ony may be admitted into evidence if: (1) th e expert is qualifie

d to testify com

petently regar

ding the matter

s he intends to address; (2) the methodology by which the expert reaches his conclusions is sufficiently reliable as determined by

the sort of inquiry

mandated in Daubert ; and (3) the testim

ony assists the tr

ier of fact, thr

ough the application of scientific, technical, or specialized expertise, to understand the evidence or to determine a fact in issue. 158 F.3d at 562; see also Quiet Tech. DC -8 v. Hurel-Dub ois UK, Ltd. , 326 F.3d 1333, 1340-41 (11 th Cir. 2003) (settin g forth the standards

governing the admission o f expert tes timony). As we hav e said, “we defe r to the dis trict cour t’s evidentiary ruling unless that ruling is ‘manifestly erroneous.’” Id. (quoting General Elec. Co. v. Joiner , 522 U.S. 136, 142, 118 S. Ct. 512, 517, 139 L. Ed. 2 d 508 (1997)). Furthermore, “‘[w] e will not overturn an evidentiary ruling and order a new trial unless the objecting party has shown a substantial prejudicial effect from the ruling.’” Quiet Tech. DC-8 , 326 F.3d at 1341-42 ( quoting Maiz , 253 F.3d at 667). In this case, the district court held that Fisher’s opinions that collusive price fixing was afoot shoul

d be excluded because

they were unhe

lpful and thus irrelevant, i.e., they did not tend to make it any m ore probable that appellees were (or were not) engaged in a price fixing consp iracy. See Holliday Wholesale81

Grocery , 231 F. Supp. 2d at 1320-22. Additionall

y, the court he

ld in at least one case that Fisher’ s testimony w as unhelpful because

he had misunders

tood the evidence. See, e.g. , Holiday Wholesale Grocery , 231 F. Supp. 2d at 1288 (holding that F isher ’s tes timon y regar ding the in stit utio n of pe rmanen t allo catio n syst ems was “prem

ised on an erroneous un

derstanding of the ev

idence” and thus inadmissible).More specificall y, the district

court excluded Fishe

r’s ultimate opinion that there wa

s an illegal price f

ixing conspiracy as irrelevant bec ause Fisher did not diffe

rentiate betwee

n lawful, consciou

s parallelism a

nd collusive price fixing. Accordingly, the c ourt held, these con

clusions were of a

bsolutely no use to a factfinder. See generally id. at 1321 (“The f ailure of Plaintif

fs’ expert to distinguish conscious par allelism from

cartel behavior m

akes his subsequent opinion inadmissib le as he finds inferen ces of collusion whe re the law finds none. Dr. Fisher is posi

ting a new theory

where certain a

spects of conscious pa

rallelism should be found to be anti competitive. This is not the state of the law. This meshing of two terms is particularly troubling when the hallmark of a ‘plus factor’ under the law is that it tends to exclude the possibility that the defendant was engaged in mere conscious parallelism.”). In Daubert , the Supreme

Court observed that:82 Rule 702 . . . re

quires that the evide

nce or testimon

y “assist the tri

er of fact to under

stand the evidence or

to determine a f

act in issue.” Thi s condition goes prim arily to relevance. E

xpert testimony

which does not relat

e to any issue in the c ase is not relevant and, ergo, nonhelpful. An additional consideration under Rule 702 -- and another aspect of relevancy -- is whether expert testimony pr

offered in the cas e is sufficiently tied to the facts of the case that it will aid the j ury in resolving a factual dispute. T

he consideration has been aptly described . . . as one of “fit.” 509 U.S. at 591, 113 S. Ct. at 2795-9 6 (internal punctuat ion and quotations omitted). Simply stated , we can percei ve no abus e of discret ion in the district c ourt’s decision to exclude some of Fisher’s testimony. Fisher’ s conclusion was that plaintiffs partici

pated in an illegal pr

ice fixing conspirac

y, and he expre ssed this opinion in the context of

several aspects of

appellants’ evide

nce, e.g., by

saying that the manufacturers’ participation in the MSA information sharing system created an infer

ence of collusion. H

owever, Fisher

defined “collu

sion” to include conscious paralleli sm. Put diffe rently, he did n

ot differentiate b etween legal and illegal pricing beha

vior, and instead sim

ply grouped both of these phenomena under the umbre

lla of illegal, col

lusive price fixing.This testimony could not have aided a finder of fact to determine whether appellees’ behavior was or was not legal, and the di strict court properl y excluded it. See Fed. R. Evid. 70283

(requiring that expert evidence “assist the trier of fact” in order to be admissible); Fed. R. Evid. 402 (“Evidence which is not relevant is n ot admissible.”). Moreover, this wa

s an equally prope

r basis at the sum

mary jud gment stage as i

t would have been in th e context of a trial. See Kumho Tire Co. Ltd. v. Carm ichael , 526 U.S. 137, 158,

119 S. Ct. 1167, 117 9, 143 L. Ed. 2d 2 38 (1999) (reinstati ng the district court’s grant of summary judgm ent where the expert testimony offered to defeat summary judgm ent did not meet the Daubert requirements). We also note that t

he “addendum

” to Fisher’s re

port on which the cla

ss focuses specifica

lly in its brief w

as not timely

filed, and this alon

e was a sufficie

nt basis for the distri ct court to reject its ad mission. See id. ; Fed. R. Civ. P. 26(a)(2)(C) (r

equiring that expert

disclosures be file

d “at the tim

es and in the sequence directed by the court”). Finally, in e very instan ce where the d istrict co urt refused to admit Fish er’s testimony,

it did so only afte

r considering it at le

ngth and concluding that it did not establish the existence of the particular plus factor in support of which it was offered. We

too have reviewed a

nd considered allof the expert testim ony in question, and we ar

e satisfied that it w

ould not have assisted a

factfinder in determining wh

ether appellees e

ngaged in lawful con

scious parallel beha

vior or collusive price fix ing.84 V Because appellants cannot demonstrate the existence of a plus factor, they cannot establish an inference of conspiracy, as they must to carry the burden imposed on them at the summary judgment stage of a co llusive price fixi ng case. Moreover, appell

ees would have rebu

tted any infere

nce that they co

nspired to fix prices by demonstrating th at the class’s conspi racy theory is utterly implausible. In addition, the cour

t’s exclusion of se

veral portions of Fi sher’s testim ony was in no sense an abuse of

discretion, i.e., did no t constitute manifest er ror. See Joiner , 522 U.S. at 142, 118 S. Ct. at 517. Accordingly, we affirm in all respects the district court’s fina l summary judgment in favor of the manufacturers

. AFFIRMED.