2015 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-15-2015

In re: Chocolate Confectionary

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Recommended Citation

"In re: Chocolate Confectionary" (2015). 2015 Decisions. Paper 979.

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

______

Nos. 14-2790 through 14-2795

______

In re: CHOCOLATE CONFECTIONARY ANTITRUST 

LITIGATION

 The Kroger Co., Safeway, Inc., Walgreen Co., 

Hy-Vee, Inc., Albertsons LLC, 

The Great Atlantic and Pacific Tea Company, Inc.,

and HEB Grocery Company L.P.,

 Appellants in 14-2790

Giant Eagle, Inc.,

 Appellant in 14-2791

United Supermarkets, LLC,

 Appellant in 14-2792

Meijer, Inc., Meijer Distribution, Inc., 

Publix Super Markets, Inc., Super Valu Inc., 

and Affiliated Foods, Inc.,

 Appellants in 14-2793

 
2

Card & Party Mart II Ltd., Jones Wholesale Grocery, Inc.*,

 PITCO Foods, and The Lorain Novelty Co., Inc.,

 as representatives of the Direct Purchaser Class,

 Appellants in 14-2794

*Pursuant to Clerk Order of July 3, 2014

CVS Pharmacy, Longs Drug Stores California, Inc., 

Rite Aid Corporation, Rite Aid Hdqtrs., Corp., 

and the Golub Corporation,

 Appellants in 14-2795

______

On Appeal from the United States District Court 

for the Middle District of Pennsylvania

(M.D. Pa. No.1-08-mdl-01935)

District Judge: Honorable Christopher C. Conner

______

Argued Thursday, April 30, 2015

Before: FISHER, HARDIMAN and ROTH, Circuit Judges.

(Filed: September 15, 2015)

Scott E. Perwin, Esq.

Kenny Nachwalter

201 South Biscayne Boulevard

1100 Miami Center

Miami, FL 33131
3

Steve D. Shadowen, Esq. ARGUED

Hilliard & Shadowen

39 West Main Street

Mechanicsburg, PA 17055

Counsel for Appellants in 14-2790

Moira E. Cain-Mannix, Esq.

Brian C. Hill, Esq.

Scott D. Livingston, Esq.

Bernard D. Marcus, Esq.

Marcus & Shapira

301 Grant Street

One Oxford Centre, 35th Floor

Pittsburgh, PA 15219

Joseph T. Lukens, Esq.

Faruqi & Faruqi

101 Greenwood Avenue

Suite 600

Jenkintown, PA 19046

Counsel for Appellants in 14-2791

Daniel H. Gold, Esq.

Haynes & Boone

2323 Victory Avenue

Suite 700 

Dallas, TX 75219,

Counsel for Appellant in 14-2792
4

Richard L. Coffman, Esq.

The Coffman Law Firm

505 Orleans Street

Suite 505

Beaumont, TX 77701

David P. Germaine, Esq.

Alberto Rodriguez, Esq.

Joseph M. Vanek, Esq.

Vanek Vickers & Masini

55 West Monroe Street

Suite 3500

Chicago, IL 60603

Steve D. Shadowen, Esq. ARGUED

Hilliard & Shadowen

39 West Main Street

Mechanicsburg, PA 17055,

Counsel for Appellants in 14-2793

Ruthanne Gordon, Esq.

Michael J. Kane, Esq.

H. Laddie Montague, Jr., Esq. ARGUED

Berger & Montague

1622 Locust Street

Philadelphia, PA 19103

Hilary K. Scherrer, Esq.

Hausfeld

1700 K Street, N.W.

Suite 650

Washington, DC 20006
5

Roberta D. Liebenberg, Esq.

Adam Pessin, Esq.

Fine Kaplan & Black

One South Broad Street

Suite 2300

Philadelphia, PA 19107

Counsel for Appellants in 14-2794

Eric L. Bloom, Esq.

Hangley Aronchick Segal Pudlin & Schiller

4400 Deer Path Road

Suite 200

Harrisburg, PA 17110,

Counsel for Appellant in 14-2795

William F. Cavanaugh, Jr., Esq. ARGUED

Stephanie M. Gyetvan, Esq.

Adeel A. Mangi, Esq.

Patterson, Belknap, Webb & Tyler

1133 Avenue of the Americas

New York, NY 10036

Counsel for Appellees Hersey Co. & Hersey Canada 

Inc.

Nicole L. Castle, Esq.

McDermott, Will & Emery

340 Madison Avenue

New York, NY 10173
6

David Marx, Esq. ARGUED

McDermott, Will & Emery

Suite 4400

227 West Monroe Street

Chicago, IL 60606

Stefan M. Meisner, Esq.

McDermott Will & Emery

500 North Capitol Street, N.W.

Washington, DC 20001

Counsel for Appellees Mars Inc. & Mars Snackfood 

United States LLC

Peter E. Moll, Esq. ARGUED

Daniel J. Howley, Esq.

Cadwalader Wickersham & Taft

700 Sixth Street, N.W.

Washington, DC 20001

Adam L. Hudes, Esq.

Stephen M. Medlock, Esq.

Carmine R. Zarlenga, III, Esq.

Mayer Brown

1999 K Street, N.W.

Washington, DC 20006,

Counsel for Appellee Nestle USA Inc.

______
7

OPINION OF THE COURT

______

FISHER, Circuit Judge.

In these consolidated antitrust conspiracy cases, two 

groups of plaintiffs, one a certified class of direct purchasers 

of chocolate products (“the Direct Purchaser Class”), and the 

other a group of individual plaintiffs (“the Individual 

Plaintiffs”) (collectively, “the Plaintiffs”), appeal the District 

Court’s summary judgment in favor of defendants The 

Hershey Company (“Hershey”); Hershey Canada, Inc.; Nestlé 

USA, Inc.; and Mars, Inc. and Mars Snackfood U.S., LLC 

(collectively, “Mars”) (all appellees are collectively referred 

to as “the Chocolate Manufacturers”). 

According to the Plaintiffs, the Chocolate 

Manufacturers conspired to raise prices on chocolate candy 

products in the United States three times between 2002 and 

2007. The Plaintiffs assert numerous errors on appeal, but at 

its core, this case is about how courts should view evidence of 

a contemporaneous antitrust conspiracy in a foreign market

when that evidence is offered to prove the existence of an 

antitrust conspiracy in the U.S. market. Here the foreign 

conspiracy involved the Chocolate Manufacturers’ Canadian 

brethren: Hershey Canada,1 Mars Canada, Inc., and Nestlé 

Canada (collectively, “the Canadian Chocolate 

Manufacturers”), as well as others. 

We agree with the District Court that the Canadian 

conspiracy evidence is ambiguous and does not support an 

 

1 Hershey Canada is the only one of the Canadian 

Chocolate Manufacturers that is a party to this appeal. 
8

inference of a U.S. conspiracy for two simple reasons. First, 

the people involved in and the circumstances surrounding the 

Canadian conspiracy are different from those involved in and 

surrounding the purported U.S. conspiracy, and second, the

evidence that the Chocolate Manufacturers in the United 

States knew of the unlawful Canadian conspiracy is weak

and, in any event, relates only to Hershey. Because we also 

conclude that the Plaintiffs’ other traditional conspiracy 

evidence is insufficient to create a reasonable inference of a 

U.S. price-fixing conspiracy, we will affirm.2

I.

A. The U.S. Chocolate Industry 

The U.S. chocolate confectionary market is dominated 

by three companies: Hershey, Mars, and Nestlé USA. 

Hershey is a publicly traded company based in Hershey, 

Pennsylvania, and sells such famous brands as Hershey’s 

Milk Chocolate Bar and Reese’s Peanut Butter Cups. Mars is 

a privately held company headquartered in Virginia and is the 

parent company of Mars Snackfood U.S. Among Mars’s most 

notable brands are M&Ms and Milky Way. Nestlé USA is a 

U.S.-based company wholly owned by Switzerland-based 

Nestlé S.A. Nestlé USA sells such popular brands as Nestlé 

Crunch and Butterfinger. Besides offering a variety of 

chocolate candy brands, the Chocolate Manufacturers offer a 

variety of sizes. Some sizes, such as single- and king-size 

 

2 Because we conclude that the District Court correctly 

granted summary judgment for the Chocolate Manufacturers, 

we do not reach the secondary question of whether the 

District Court abused its discretion by excluding a portion of 

the Individual Plaintiffs’ economic expert’s report calculating 

the damages caused by Nestlé USA. 
9

bars (“singles” and “kings”), are for immediate consumption, 

while others, including bags containing miniature or bite-size 

candies, are for future consumption. This case focuses on 

immediate consumption candy sizes.

The U.S. chocolate market is highly concentrated. 

During the relevant period, these three companies controlled 

more than 75% of the U.S. market, with Hershey controlling 

approximately 42%, Mars controlling approximately 28%, 

and Nestlé USA controlling roughly 8%.

The primary raw materials for the various chocolate 

products at issue are generally the same: cocoa, sugar, dairy

products, peanuts, almonds, fats, and oils. Naturally, the costs 

of these ingredients affect the prices of the chocolate 

products. To hedge against cost increases for these 

ingredients, the Chocolate Manufacturers take advantage of 

futures exchanges. For example, in a 2002 internal report, 

Hershey understood that through futures contracts, its 

coverage on cocoa costs “through mid-2004” was “favorable 

versus [its] principal competitors.” J.A. 4620. Still, between 

2002 and 2007, it is undisputed that cocoa prices increased. 

See J.A. 6273–74 (acknowledging that Hershey’s actual 

cocoa costs increased from 2002 to 2006).

Parallel price increases—in which one company raises 

prices and its rivals follow—are not uncommon in this 

industry. Although the price increases have not followed a 

consistent playbook—some have involved changes in candy 

weight while others have involved delays between the initial 

and subsequent pricing actions—the Chocolate Manufacturers 

raised prices together in 1979, 1981, 1984, 1986, 1991, and 

1995. 

B. The Purported U.S. Conspiracy
10

According to the Plaintiffs, the Chocolate 

Manufacturers conspired to raise U.S. list prices on chocolate 

candy products three times between 2002 and 2007. On 

December 7, 2002, following a seven-year period of stagnant 

prices, Mars announced list price increases on singles and six

packs by 3.5 cents per bar effective December 9, 2002. On 

December 9, Hershey announced an identical price increase

on singles and a slightly lesser price increase on six packs; in 

addition, Hershey announced price increases on kings and ten 

packs (all effective January 2003). On December 11, Nestlé

USA’s prices moved too, effectively matching Mars and 

Hershey’s price increases on singles, Hershey’s price increase 

on kings, and Mars’s greater price increase on six packs. 

Days later, Mars matched Hershey’s increase on kings and 

exceeded Hershey’s increase on ten packs. 

Next, in November 2004, Mars initiated another price 

increase, this time on future consumption products. Nearly 

one month later, Hershey followed Mars’s price increase on 

future consumption products and also raised prices on singles, 

kings, and six packs. Soon after, Mars matched Hershey’s 

increases. Nestlé USA followed with nearly identical 

increases several days later. Finally, on March 23, 2007, Mars 

initiated the final increase during the alleged conspiracy 

period when it increased prices on singles and kings. Hershey 

matched the increases on April 4, and Nestlé USA followed

the next day.

The conspiracy was furthered, the Plaintiffs argue, by 

the Chocolate Manufacturers exchanging information on each 

other’s planned price increases before publicly announcing 

those increases. For example, an internal Hershey document 

shows that Hershey had information as early as September 

2002 that Mars was “considering a price increase due to 

rising cocoa costs,” J.A. 5300, and in announcing the 2002 
11

Mars price increase to the Hershey board of directors, 

Hershey’s CEO, Rick Lenny, characterized the Mars increase 

as “roughly in line with expectations,” J.A. 4620. 

In addition, the Plaintiffs highlight various 

opportunities the Chocolate Manufacturers had to conspire. 

For example, in 2002, at a time when the U.S. chocolate 

market was not thriving, the Hershey Trust, Hershey’s 

controlling shareholder, put Hershey up for sale. Hershey’s 

rivals, including Nestlé and Cadbury, were among the

interested buyers. Through the proposed sale process, Nestlé 

and Cadbury obtained information about Hershey’s business, 

but the record is unclear to what extent Hershey’s most 

sensitive information, such as commodities cost coverage, 

changed hands and who received it. The Hershey Trust

terminated the sale process in September 2002, shortly before 

the first price increase in the purported conspiracy.

The Plaintiffs also point north to Canada, where the 

Canadian chocolate market was embroiled in its own antitrust 

conspiracy at the same time as the purported U.S. conspiracy. 

Like the U.S. market, the Canadian market is very 

concentrated, with the three Canadian Chocolate 

Manufacturers controlling roughly 66% of the market. 

Hershey is the parent company of Hershey Canada, and Mars 

is the parent company of Mars Canada. Hershey Canada and 

Mars Canada report to and need final approval from U.S.-

based executives on pricing decisions, but the Canadian 

subsidiaries are separate legal entities, operate exclusively in 

Canada, and run their own day-to-day operations. Nestlé 

Canada, on the other hand, is a subsidiary of Switzerlandbased Nestlé S.A., so it is different from Hershey Canada and 

Mars Canada in that it does not report to a U.S. parent 

company. 
12

From 2002 to 2007, Mars Canada, Hershey Canada, 

Nestlé Canada, and Cadbury Adams Canada (“Cadbury 

Canada”) allegedly conspired to limit competition on trade 

spend3and to raise prices. The trade spend conspiracy began 

in 2002 when ITWAL, a direct purchaser and major 

distributor in Canada, sent notices to the Canadian Chocolate 

Manufacturers asking them to reign in trade spend. ITWAL’s 

efforts were successful, yielding commitments from the 

Canadian Chocolate Manufacturers that they would reduce 

trade spend. In April 2002, ITWAL’s president sent a notice 

to each of the Canadian Chocolate Manufacturers stating,

“[I]t appears your efforts to ‘dry up’ this activity may be 

starting to work!” J.A. 7128. Driving home the point, 

ITWAL’s president sent another notice in December of that 

year to all the Canadian Chocolate Manufacturers stating, “I 

WOULD LIKE TO EXTEND CONGRATULATIONS TO 

YOU ALL AS WE WIND UP THE YEAR WITH RESPECT 

TO YOUR CONCERTED AND COMMITTED EFFORTS 

TO CLEAN UP THE DYSFUNCTIONAL RETAIL TRADE 

SPENDING.” J.A. 7157 (emphasis added).

Additionally, there is evidence suggesting a pricefixing conspiracy among the Canadian Chocolate 

Manufacturers, including secret meetings involving pricing 

discussions. In 2005, for example, Nestlé Canada CEO Bob 

Leonidas told Cadbury Canada President David Sculthorpe 

that Nestlé Canada would be increasing prices and proved it 

with a copy of a not-yet-issued price-increase announcement, 

 

3 Trade spend refers to rebates, allowances, discounts, 

and promotions that manufacturers individually negotiate 

with retailers that effectively lower the price that the customer 

pays. 
13

and Sculthorpe promised that Cadbury Canada would follow. 

J.A. 11817–19.

The Canadian scheme was ultimately the subject of a 

criminal investigation by the Canadian Competition Bureau. 

Cadbury Canada cooperated with the investigation, and 

Hershey Canada did as well, with Hershey pleading guilty to 

one count of price fixing stemming from a 2007 incident and 

paying a $4 million (Canadian) fine. J.A. 13564–65. In 2013, 

Nestlé Canada, Mars Canada, ITWAL, Leonidas, and 

ITWAL’s president were indicted in Canada. The Canadian 

case is still pending. 

C. The Procedural History

The cases on appeal have a long history. They began 

as ninety-one separate civil actions that were filed against the 

Chocolate Manufacturers as well as their Canadian 

counterparts and several Cadbury entities. In addition to 

various state law claims, the actions brought claims under §§

4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26, alleging 

that the defendants engaged in a U.S. price-fixing conspiracy 

in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. In 

2008, the Judicial Panel on Multidistrict Litigation 

consolidated the actions for pretrial proceedings in the U.S. 

District Court for the Middle District of Pennsylvania

pursuant to 28 U.S.C. § 1407(a).

After the cases were consolidated, each of the 

defendants moved to dismiss the complaints for failure to 

state a claim under Rule 12(b)(6) of the Federal Rules of Civil 

Procedure, but on March 4, 2009, the District Court denied 

the motions except as to certain state law claims. See In re 

Chocolate Confectionary Antitrust Litig., 602 F. Supp. 2d 
14

538, 548–49 (M.D. Pa. 2009).

4 At the pleading stage, the 

District Court decided that the Plaintiffs had adequately pled 

a price-fixing conspiracy in violation of the Sherman Act. In 

so holding, the District Court relied on allegations regarding 

the contemporaneous Canadian conspiracy and the Canadian 

chocolate market’s integration with the U.S. chocolate 

market. Id. at 576–77. In 2011, all the Cadbury defendants 

were dismissed after they reached a settlement with the 

various groups of plaintiffs. As part of the agreement with the 

Direct Purchaser Class, Cadbury agreed to fully cooperate 

with the Plaintiffs during discovery. J.A. 2642.

On December 7, 2012, the District Court certified a 

class of all direct purchasers of chocolate candy products for 

resale from the Chocolate Manufacturers between December 

9, 2002 and December 20, 2007, which formed the Direct 

Purchaser Class. The Individual Plaintiffs, comprising mostly 

grocery and drug stores, pursued their claims individually. In 

certifying the Direct Purchaser Class, the District Court 

denied Daubert5challenges to the Class’s economic experts, 

Dr. Robert D. Tollison and Dr. James T. McClave. In re 

Chocolate Confectionary Antitrust Litig., 289 F.R.D. 200, 213 

(M.D. Pa. 2012). Briefly, Dr. Tollison opined that the U.S. 

chocolate market was conducive to price fixing and that a 

price-fixing conspiracy did occur in this case, while Dr. 

 

4 Several defendants also moved to dismiss for lack of 

personal jurisdiction under Rule 12(b)(2). After initially 

deferring ruling on these motions, the District Court 

ultimately granted the motions as to Mars Canada, Nestlé 

S.A., and Nestlé Canada. See In re Chocolate Confectionary 

Antitrust Litig., 641 F. Supp. 2d 367, 373 (M.D. Pa. 2009).

5 Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 

(1993). 
15

McClave testified to the class-wide damages caused by the 

Chocolate Manufacturers’ supracompetitive prices. 

In May 2013, the District Court considered another 

Daubert motion, this time challenging the testimony of the 

Individual Plaintiffs’ economic expert, Dr. Christopher A. 

Vellturo. The District Court granted the motion to exclude 

part of Dr. Vellturo’s testimony and reports on the Individual 

Plaintiffs’ damages caused by Nestlé USA’s alleged 

overcharges because Dr. Vellturo based his calculations on 

Mars’s profit margin data, not Nestlé USA’s. The Individual 

Plaintiffs appeal that decision here.6 As for the remainder of 

Dr. Vellturo’s testimony, the District Court denied the 

Daubert motion, concluding that Dr. Vellturo’s other 

opinions, including his opinion that the Canadian conspiracy 

facilitated or “actuated” the implementation of the U.S. 

conspiracy, were admissible. J.A. 100–03.

At the close of discovery, each of the Chocolate 

Manufacturers filed separate summary judgment motions as 

to the Individual Plaintiffs’ claims and the Direct Purchaser 

Class’s claims. On February 26, 2014, the District Court 

granted summary judgment in favor of the Chocolate 

Manufacturers. See In re Chocolate Confectionary Antitrust 

Litig., 999 F. Supp. 2d 777, 780 (M.D. Pa. 2014). The 

Plaintiffs’ claims failed, the District Court reasoned, because 

they could not show that the Chocolate Manufacturers acted 

against their self-interest and because there was no traditional 

conspiracy evidence. In the District Court’s view, the 

Plaintiffs’ evidence was as consistent with lawful competition 

as with an illegal conspiracy and therefore could not raise a 

 

6 As explained earlier, we do not reach this issue 

because we will affirm the District Court’s summary 

judgment. See supra note 2.
16

reasonable inference of a price-fixing conspiracy. Id. at 805. 

This decision is the central issue on appeal. 

The Plaintiffs filed timely appeals. 

II.

The District Court had jurisdiction under 15 U.S.C. § 

15(a) and 28 U.S.C. §§ 1331 and 1337. We have jurisdiction 

under 28 U.S.C. § 1291. We exercise plenary review over the 

District Court’s summary judgment and apply the same 

standard the District Court did. In re Baby Food Antitrust 

Litig., 166 F.3d 112, 123–24 (3d Cir. 1999).

Because substantive antitrust law is intertwined with 

our standard of review, we first discuss the underlying legal 

principles. The Plaintiffs’ claims arise from § 1 of the 

Sherman Act, which prohibits “[e]very contract, combination 

in the form of trust or otherwise, or conspiracy, in restraint of 

trade or commerce.” 15 U.S.C. § 1. Although its language is 

broad, § 1 only prohibits unreasonable restraints of trade. In 

re Flat Glass Antitrust Litig., 385 F.3d 350, 356 (3d Cir. 

2004). Therefore, in some cases, courts must apply “the socalled rule of reason,” a case-by-case inquiry designed to 

assess whether challenged conduct is an anticompetitive 

practice. Baby Food, 166 F.3d at 118. 

Other restraints of trade, however, have such little 

redeeming competitive value that they are deemed per se

unreasonable. In re Ins. Brokerage Antitrust Litig., 618 F.3d

300, 316 (3d Cir. 2010). Horizontal price fixing among 

competitors—what the Plaintiffs claim happened here—is a 

classic example of a restraint of trade analyzed under the per 
17

se standard.7 Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006). 

Price-fixing agreements “are all banned because of their 

actual or potential threat to the central nervous system of the 

economy.” United States v. Socony-Vacuum Oil Co., 310 U.S. 

150, 224 n.59 (1940). 

In per se cases like this one, “the plaintiff need only 

prove that the defendants conspired among each other and 

that this conspiracy was the proximate cause of the plaintiff’s 

injury.” InterVest, Inc. v. Bloomberg, L.P., 340 F.3d 144, 159 

(3d Cir. 2003). Without proof of concerted action, the 

plaintiff’s claim fails because the “very essence of a section 1 

claim . . . is the existence of an agreement.” Alvord-Polk, Inc. 

v. F. Schumacher & Co., 37 F.3d 996, 999 (3d Cir. 1994). 

Therefore, proof of a “unity of purpose or a common design 

and understanding or a meeting of minds in an unlawful 

arrangement” is required. Id. (internal quotation marks 

omitted). Such proof may come in the form of direct 

evidence, e.g., an explicit admission from a participant that an 

antitrust conspiracy existed, or circumstantial evidence. 

InterVest, 340 F.3d at 159. An important corollary to the 

agreement requirement is that § 1 liability cannot be 

predicated on a defendant’s unilateral actions, no matter its

anticompetitive motivations. Monsanto Co. v. Spray-Rite 

Serv. Corp., 465 U.S. 752, 761 (1984) (“Independent action is 

not proscribed [by § 1].”); InterVest, 340 F.3d at 159. 

Returning to our standard of review, the summary 

judgment standard in antitrust cases is generally no different 

from the standard in other cases. Flat Glass, 385 F.3d at 357. 

Here as elsewhere, summary judgment is appropriate when 

 

7 A horizontal price-fixing agreement occurs when

competitors on the same market level agree to fix or control 

prices for their goods or services. 
18

the evidence “shows that there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a 

matter of law.” Fed. R. Civ. P. 56(a). We also review the 

record as a whole and in the light most favorable to the 

nonmovant, drawing reasonable inferences in its favor. See 

Flat Glass, 385 F.3d at 357.

There is, however, “an important distinction” in 

antitrust cases. Id. “[A]ntitrust law limits the range of 

permissible inferences from ambiguous evidence in a § 1 

case.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 

U.S. 574, 588 (1986). “[C]onduct as consistent with 

permissible competition as with illegal conspiracy does not, 

standing alone, support an inference of antitrust conspiracy.” 

Id. Therefore, unless the plaintiff “present[s] evidence ‘that 

tends to exclude the possibility’ that the alleged conspirators 

acted independently,” summary judgment is appropriate. Id. 

(quoting Monsanto, 465 U.S. at 764). The purpose of this 

standard is to avoid mistaken inferences that could impose

liability for lawful conduct and, consequently, “chill the very 

conduct the antitrust laws are designed to protect.” Id. at 594; 

accord Flat Glass, 385 F.3d at 357.

Under Matsushita, the range of acceptable inferences 

that may be drawn from ambiguous or circumstantial

evidence “‘var[ies] with the plausibility of the plaintiffs’ 

theory and the dangers associated with such inferences.’” Flat 

Glass, 385 F.3d at 357 (quoting Petruzzi’s IGA Supermarkets, 

Inc. v. Darling-Del. Co., 998 F.2d 1224, 1232 (3d Cir. 1993)). 

If the plaintiff’s theory “makes no economic sense” and if 

drawing inferences in its favor would deter procompetitive 

conduct, the plaintiff must produce “more persuasive 
19

evidence” to support its claim. Id. (internal quotation marks 

omitted).8

Importantly, even when armed with a plausible 

economic theory, a plaintiff relying on ambiguous evidence 

alone cannot raise a reasonable inference of a conspiracy 

sufficient to survive summary judgment. Matsushita, 475 

U.S. at 597 n.21 (“We do not imply that, if petitioners had 

had a plausible reason to conspire, ambiguous conduct could 

suffice to create a triable issue of conspiracy.”); Rossi v. 

Standard Roofing, Inc., 156 F.3d 452, 466 (3d Cir. 1998). At 

the same time, “defendants are [not] entitled to summary 

judgment merely by showing that there is a plausible 

explanation for their conduct; rather the focus must remain on 

the evidence proffered by the plaintiff and whether that 

evidence tends to exclude the possibility that the defendants 

 

8 We illustrated the point well in Flat Glass by 

comparing the theories involved in Matsushita and Petruzzi’s, 

see 385 F.3d at 358, and we summarize that discussion here. 

In Matsushita, the Supreme Court criticized the alleged multifirm, predatory pricing scheme as inherently “speculative,” so 

the Court refused to draw an inference of a conspiracy from 

ambiguous evidence. See 475 U.S. at 588–91, 597–98. In 

Petruzzi’s, by contrast, we drew more liberal inferences in the 

plaintiff’s favor because the plaintiff’s theory—that the 

defendants conspired not to compete with each other on 

existing customer accounts—made “perfect economic sense.” 

998 F.2d at 1232. The only way for the defendants in 

Petruzzi’s to increase profits in this manner was by 

agreement. Moreover, this conduct of refusing to compete 

was obviously not procompetitive. Id.
20

were acting independently.” Rossi, 156 F.3d at 467 (internal 

quotation marks and brackets omitted).9

III.

The Plaintiffs build their case on a logical enough 

foundation: three parallel price increases by the Chocolate 

Manufacturers between 2002 and 2007. Moreover, the 

Plaintiffs’ theory—that the Chocolate Manufacturers 

conspired to fix prices at supracompetitive levels—“makes 

perfect economic sense.” Flat Glass, 385 F.3d at 358. If true, 

the alleged conduct is also not procompetitive. Id. But despite 

the facial plausibility of the Plaintiffs’ theory and the 

circumstantial evidence supporting it, we must be cautious. 

The U.S. chocolate market is “a textbook example of an 

oligopoly,”10 J.A. 2187, and we cannot infer too much from 

mere evidence of parallel pricing among oligopolists, Flat 

Glass, 385 F.3d at 358. 

Our caution is based on the economic theory of 

interdependence, which recognizes the differences between 

 

9 The “strictures of Matsushita d[o] not apply” when 

plaintiffs use direct evidence to prove a conspiracy because

“no inferences are required from direct evidence to establish a 

fact,” thus negating any concern about the reasonableness of 

the inferences drawn from that evidence. Petruzzi’s, 998 F.2d 

at 1233. Nor are these concerns implicated when there is 

“strong circumstantial evidence” because such evidence is 

“sufficiently unambiguous.” Id. (internal quotation marks 

omitted). 

10 An oligopoly is a market “in which a few relatively 

large sellers account for the bulk of the output.” 2B Phillip E. 

Areeda & Herbert Hovenkamp, Antitrust Law ¶ 404a, at 10 

(4th ed. 2014).
21

competitive markets (markets with many smaller firms) and 

oligopolistic markets (concentrated markets with only a few 

firms). In competitive markets, the theory goes, any one 

firm’s change in output or price would go unnoticed by its 

competitors because the effects of that firm’s increased sales 

“would be so diffused among its numerous competitors.” Id.

at 359 (internal quotation marks omitted). In a concentrated

or oligopolistic market, by contrast, a single firm’s change in 

output or price “will have a noticeable impact on the market 

and on its rivals.” Id. (internal quotation marks omitted). 

Therefore, the theory of interdependence posits that “any 

rational decision [by an oligopolist] must take into account 

the anticipated reaction of the other firms.” Id. (internal 

quotation marks and brackets omitted). The upshot is 

oligopolists may maintain supracompetitive prices through 

rational, interdependent decision-making, as opposed to 

unlawful concerted action, if the oligopolists independently 

conclude that the industry as a whole would be better off by 

raising prices. Id.

Even though this practice of parallel pricing, known as 

“conscious parallelism,” produces anticompetitive outcomes, 

it is lawful under the Sherman Act for two reasons. Id. at 

359–60. First, conscious parallelism is not an agreement, id.

at 360; instead, it “can be a necessary fact of life” in 

oligopolies, Baby Food, 166 F.3d at 122. Second, conscious 

parallelism is lawful not because it “is desirable (it is not),”

but because courts have no effective remedy for the problem. 

Clamp-All Corp. v. Cast Iron Soil Pipe Inst., 851 F.2d 478, 

484 (1st Cir. 1988) (Breyer, J.); accord Flat Glass, 385 F.3d 

at 360.

Accordingly, evidence of conscious parallelism cannot 

alone create a reasonable inference of a conspiracy. Baby 

Food, 166 F.3d at 122. To move the ball across the goal line, 
22

a plaintiff must also show that certain plus factors are present. 

Flat Glass, 385 F.3d at 360. Plus factors are “proxies for 

direct evidence” because they “tend[] to ensure that courts 

punish concerted action—an actual agreement—instead of the 

unilateral, independent conduct of competitors.” Id. (internal 

quotation marks omitted). Although we have not identified an 

exhaustive list of plus factors, they may include “(1) evidence 

that the defendant had a motive to enter into a price fixing 

conspiracy; (2) evidence that the defendant acted contrary to 

its interests; and (3) ‘evidence implying a traditional 

conspiracy.’” Id. (quoting Petruzzi’s, 998 F.2d at 1244). 

Yet in cases alleging parallel price increases, as 

opposed to some other form of concerted action, “the first two 

factors largely restate the phenomenon of interdependence.” 

Id.; see also Petruzzi’s, 998 F.2d at 1244 (acknowledging that 

evidence of actions against self-interest may overlap with 

lawful interdependence in parallel pricing cases, but 

concluding that the overlap concern is absent when the 

challenged conduct involves parallel non-pricing decisions). 

Evidence of a motive to conspire means the market is 

conducive to price fixing, and evidence of actions against 

self-interest means there is evidence of behavior inconsistent 

with a competitive market. See Flat Glass, 385 F.3d at 360–

61. By nature, oligopolistic markets are conducive to price

fixing and will often exhibit behavior that would not be 

expected in competitive markets. Id. Therefore, these factors 

are neither necessary nor sufficient to preclude summary 

judgment, at least where the claim is price fixing among 

oligopolists. Id. at 361 n.12. 

That leaves traditional non-economic evidence of a 

conspiracy as the most important plus factor in cases like this 

one. Id. at 361. This plus factor looks for “proof that the 

defendants got together and exchanged assurances of 
23

common action or otherwise adopted a common plan even 

though no meetings, conversations, or exchanged documents 

are shown.” Id. (internal quotation marks omitted).

With these principles in mind, we now turn to whether 

the Plaintiffs have identified enough evidence to survive 

summary judgment. 

IV.

Lacking direct evidence, the Plaintiffs rely on 

circumstantial evidence to raise a reasonable inference of a 

conspiracy. The District Court found, and the parties do not 

dispute, that the Plaintiffs presented sufficient evidence of 

parallel pricing. Therefore, our analysis focuses on whether 

there are sufficient plus factors to defeat summary judgment. 

A. Motive

The District Court found that the Plaintiffs had 

adduced sufficient evidence of the Chocolate Manufacturers’ 

motive to enter into a price-fixing conspiracy, and again, no 

one disputes this conclusion on appeal. Given the market 

concentration and high barriers to entry, the U.S. chocolate 

confectionary market was ripe for collusion. But evidence of 

motive without more does not create a reasonable inference of 

concerted action because it merely restates interdependence. 

See Flat Glass, 385 F.3d at 360. 

B. Actions Against Self-Interest

The District Court next held that the Plaintiffs had not 

provided enough evidence to show that the Chocolate 

Manufacturers acted contrary to their self-interest by raising 

prices in 2002, 2004, and 2007. Unlike the first plus factor, 

the parties vigorously dispute the correctness of the District 

Court’s conclusion on this point. To the Plaintiffs, the District 
24

Court’s analysis is flawed, rife with inferences drawn against 

them and contradicted by their expert evidence concluding 

that cost increases could not explain the price increases. To 

the Chocolate Manufacturers, the District Court analyzed the 

issue correctly by noting the Plaintiffs’ inability to rebut the 

Chocolate Manufacturers’ several legitimate and 

procompetitive justifications for the price increases as well as 

their divergent tactics and strategies implementing the price 

increases.

Part of the disagreement here appears to be based on a 

misconception about what this factor means: as discussed 

above, evidence of actions against self-interest means there is 

evidence of behavior that is inconsistent with a competitive 

market. So in Flat Glass, we found this factor present based 

on the lack of evidence showing that the price increases were 

due to increases in costs or demand. See 385 F.3d at 362. 

Similarly here, the Plaintiffs’ economic experts uniformly 

opined that cost increases could not explain the price 

increases. See J.A. 5135 (Vellturo Report) (“I find that 

increased costs were a minor (if significant at all) 

consideration in Defendants’ subject price increases.”); J.A. 

13893 (Tollison Declaration) (“[C]osts provide no rational 

economic explanation for price increases . . . .”); J.A. 14058–

60 (McClave Report) (“My model shows . . . that prices were 

elevated to levels during the class period well above those 

justified by changes in cost and demand.”). Further, the 

Plaintiffs’ experts rejected criticisms that their analyses did 

not account for cost variables beyond raw material costs. 

These conclusions find at least some support from non-expert 

evidence in the record. Compare J.A. 4618–19 (October 2002 

memorandum from Hershey CEO Lenny to the Hershey 

board of directors noting “extremely sluggish retail 

environment” and explaining that Hershey would not raise 
25

prices in the near term in part because Hershey was covered 

on costs), with J.A. 7654 (announcing December 2002 

Hershey price increase). Therefore, we agree with the 

Plaintiffs (and disagree with the District Court and the 

Chocolate Manufacturers) to this extent: the aforementioned 

evidence shows that the U.S. chocolate market may not have 

been acting consistently with a competitive market.

This is not to say that the record evidence uniformly 

supports the Plaintiffs’ position; to the contrary, there is 

substantial support for the Chocolate Manufacturers’ 

contention that their actions were consistent with, and the 

result of, competition. For example, there is evidence 

showing that the price increases were taken in anticipation of

rising costs; that costs actually did go up during the 

conspiracy period; that the Chocolate Manufacturers tried to 

catch each other by surprise with the timing of, and the 

products associated with, the price increases; and that the 

prevalent practice of line pricing11 by retailers made it 

 

11 Line pricing is the practice engaged in by retailers of 

setting the same retail price for competing candy products of 

the same size. Given the practice of line pricing, the 

Chocolate Manufacturers contend that once one manufacturer 

raises list prices, it makes sense for all to follow. If a retailer 

raises the retail price on all competing candy products of a 

given size in response to one manufacturer raising list prices, 

the other manufacturers will suffer a decline in sales volume 

due to the higher retail price and lose out on any increased 

revenue unless they follow the list price increase. See J.A. 

1084; see also J.A. 1278 (Mars 2002 document explaining it 

would follow Hershey’s price increase on kings because “the 

market would move to the higher price with or without us”).
26

rational and self-interested for the Chocolate Manufacturers 

to follow price increases initiated by a rival. 

Our conclusion is instead a recognition of the case’s 

summary judgment posture, where we must draw reasonable 

inferences in the Plaintiffs’ favor. At this stage, the 

admissible testimony from the Plaintiffs’ experts, coupled 

with other record evidence suggesting that the price increases 

were not fully explained by cost increases, does the trick. 

Although the Chocolate Manufacturers have marshaled 

considerable evidence in support of their positions, “we must 

accept that the [P]laintiffs have presented some admissible 

evidence that higher prices during the period of the alleged 

conspiracy cannot be fully explained by causes consistent 

with active competition . . . .” In re High Fructose Corn 

Syrup Antitrust Litig., 295 F.3d 651, 660 (7th Cir. 2002) 

(Posner, J.). 

But the Plaintiffs’ victory on this point is a hollow one. 

As previously noted, given this factor’s purpose of identifying 

conduct inconsistent with a competitive market, it often 

restates interdependence. Flat Glass, 385 F.3d at 362 (“All 

the above indicates that the price increases were collusive, but 

not whether the collusion was merely interdependent or the 

result of an actual agreement.”). To prove a conspiracy here, 

the evidence “must go beyond mere interdependence. Parallel 

pricefixing must be so unusual that in the absence of an 

advance agreement, no reasonable firm would have engaged 

in it.” Baby Food, 166 F.3d at 135. 

The Plaintiffs have fallen well short of this standard. 

Even if we credit the Plaintiffs’ arguments, all they show is 

that costs—which they acknowledge were increasing—did 

not justify the price increases observed in 2002, 2004, and 

2007. To the Plaintiffs’ experts, the fact that cost increases 
27

couldn’t explain the price increases seems to be enough to 

show a price-fixing agreement. See J.A. 2187–88 (Vellturo 

Report) (claiming that above-competitive pricing must result 

from an express or tacit agreement); J.A. 13891–93 (Tollison 

Report) (opining that price increases taken without cost 

increases should have been defeated because other firms 

would be better off not following). But evidence of a price 

increase disconnected from changes in costs or demand only 

raises the question: was the anticompetitive price increase the 

result of lawful, rational interdependence or of an unlawful 

price-fixing conspiracy? See Flat Glass, 385 F.3d at 362; 

Petruzzi’s, 998 F.2d at 1244 (“[I]t is quite likely that 

oligopolists acting independently might sell at the same 

above-marginal cost price as their competitors because the 

firms are interdependent and competitors would match any 

price cut.”); Clamp-All, 851 F.2d at 484 (“One does not need 

an agreement to bring about this kind of follow-the-leader 

effect in a concentrated industry.”). The Plaintiffs’ experts do 

not answer this question.12

 

12 This case is quite different from Petruzzi’s, where 

we said the economic evidence went “a long way” in meeting 

the plaintiff’s burden. 998 F.2d at 1241. There the alleged 

conspiracy was not price fixing but instead an agreement to 

compete only on new customer accounts and not to compete 

on existing customer accounts (i.e., competition ended once a 

defendant “won” a new account). The industry (fat and bone 

rendering) was homogeneous, meaning the only basis for 

competition among the defendants was price. The economic 

evidence in Petruzzi’s showed a price differential between 

new and existing accounts (new accounts were offered a 

significantly better price than were existing accounts), which 

could only rationally be explained by an unlawful agreement. 
28

The Individual Plaintiffs acknowledge 

interdependence but persist by arguing that Hershey, in 

particular, acted against its self-interest by following Mars’s 

price increases rather than maintaining lower prices to

increase its market share. For support, the Individual 

Plaintiffs point to Hershey’s favorable cost positions in 2002 

relative to its rivals as well as Mars’s decision not to follow 

Hershey’s 2001 price increase on packaged candy, a decision 

which led to Mars increasing its market share. 

Deciding not to follow a price increase initiated by a 

rival is just one rational response that an oligopolist can take, 

a fact acknowledged by economists, including the Individual 

Plaintiffs’ economic expert, Dr. Vellturo. J.A. 2187 

(recognizing the “wide range of ‘competitive’ results” in 

oligopolistic markets); 6 Phillip E. Areeda & Herbert 

Hovenkamp, Antitrust Law ¶ 1429b, at 222–23 (3d ed. 2010)

(discussing how firms in an oligopolistic market may in some 

instances choose to follow price increases while in others 

choose not to follow). That Hershey may have maintained a 

temporary cost advantage over its rivals did not make it 

irrational for Hershey to follow a price increase if it believed 

it would ultimately be better off by doing so. Indeed, the 

evidence is fully consistent with Hershey recognizing its 

temporary cost advantage but also recognizing how a price 

increase may still be to its benefit as well as the benefit of the 

chocolate industry as a whole. See J.A. 4619 (letter from 

Hershey CEO Lenny to the Hershey board explaining why 

 

Id. Here, by contrast, the Plaintiffs’ economic evidence is 

based on parallel price increases among oligopolists without

corresponding cost increases, a result which, as previously 

noted, is as consistent with interdependence as with a 

conspiracy. 
29

Hershey would not initiate a price increase in the near term 

but also noting that Hershey was “prepared to follow” any 

price increase initiated by a rival and adopting a “wait and 

see” strategy). This follow-the-leader strategy is especially 

reasonable in the U.S. chocolate market given the prevalent 

practice of line-pricing by retailers. Therefore, even focusing 

on Hershey and its cost advantages, the Plaintiffs cannot tell 

us whether Hershey’s decision to follow the price increase 

was due to interdependence or an unlawful agreement. 

Moreover, focusing on Hershey’s cost advantage over 

its rivals says nothing of Mars’s and Nestlé USA’s decisions

to raise prices. Even if Hershey’s motivations for following 

the price increase were anticompetitive, unilateral 

anticompetitive conduct is not proscribed by § 1 of the 

Sherman Act. See InterVest, 340 F.3d at 159. 

In sum, although there is some evidence that the 

Chocolate Manufacturers acted inconsistently with a 

competitive market, the evidence does not go beyond 

interdependence and therefore does not create an inference of 

a conspiracy.

C. Traditional Conspiracy Evidence

We now consider the most important plus factor in this 

case: whether there is enough traditional conspiracy evidence 

to create a reasonable inference that the Chocolate 

Manufacturers conspired to fix prices. The Plaintiffs identify 

several categories of traditional conspiracy evidence, but the 

most important is evidence of the contemporaneous Canadian 

conspiracy. We therefore discuss the Canadian conspiracy 

evidence first, followed by the Plaintiffs’ other traditional 

conspiracy evidence. 

1. The contemporaneous Canadian 

conspiracy
30

The Individual Plaintiffs and the Direct Purchaser 

Class do not ascribe the same meaning to the Canadian 

conspiracy evidence. According to the Individual Plaintiffs, it 

is reasonable to infer a domestic conspiracy from the 

evidence of a Canadian conspiracy based on the fact that the 

Canadian market is a similar adjacent market involving the 

same participants. The Individual Plaintiffs further contend 

that a jury should be permitted to weigh evidence of the 

Canadian conspiracy in assessing the credibility of the 

Chocolate Manufacturers’ explanations for the U.S. price 

increases. Finally, the Individual Plaintiffs argue, based on 

testimony from their economic expert, that the Canadian 

conspiracy “actuated” or facilitated the U.S. conspiracy. 

According to Dr. Vellturo’s actuation theory, the sharing of 

information between the Chocolate Manufacturers and their 

Canadian counterparts led the Chocolate Manufacturers to 

observe the success of the Canadian conspiracy and 

implement a tacit or express U.S. conspiracy. See J.A. 2191–

92. On appeal, the Direct Purchaser Class distances itself 

from the actuation theory, arguing instead that the Canadian 

conspiracy is relevant to assessing the Chocolate 

Manufacturers’ conduct because it enhances the plausibility 

of a domestic conspiracy. 

We have not considered what inferences may be 

permissibly drawn from evidence of a foreign antitrust 

conspiracy about the existence of a domestic antitrust 

conspiracy. The Areeda treatise guides our analysis, and we 

quote from it at length:

Illegal behavior elsewhere in time or place does not 

generally allow the inference of an immediate 

conspiracy. If the immediately challenged behavior 

would not imply a conspiracy among firms that are 

similar to the defendants [but that are not involved in a 
31

conspiracy elsewhere], then a distinct conspiracy in the 

past or in a different market has little power to explain 

the present behavior. But if there is other evidence of a 

present conspiracy, the defendants’ sins elsewhere may 

cast doubt on the truthfulness of their innocent 

explanations. 

Of course, the scope of a proved conspiracy will often 

be uncertain. It may be difficult to define the 

boundaries of a conspiracy proved to cover an adjacent 

time period, product, or region. Competitors who were 

conspiring in this market yesterday may still be doing 

so today. Parties who are conspiring in New York may 

be doing the same in New Jersey. 

If immediate parallelism is as likely to result from 

present interdependence as from proved conspiracy in 

the past, we should not lightly assume in fact or 

presume in law that the earlier conspiracy continues. 

Contemporaneous conspiracies in adjacent geographic 

markets could reasonably be deemed sufficient to 

transfer to the defendants at least the burden of going 

forward with evidence of an explanation that 

performance is different in the second market, that any 

motivation for conspiracy in one market does not 

extend to the other, or that the personnel or other 

circumstances make it unreasonable to interpret the 

proved conspiracy as extending to the adjacent market. 

Areeda & Hovenkamp, supra, ¶ 1421a, at 160. 
32

The Second and Eleventh Circuits have taken positions 

consistent with the Areeda treatise. In In re Elevator Antitrust 

Litigation, 502 F.3d 47, 51–52 (2d Cir. 2007) (per curiam), 

the Second Circuit concluded that a claim of a domestic or 

worldwide conspiracy in the elevator and elevator services 

markets was unsupported by allegations of a conspiracy in the 

European elevator market given the absence of “any evidence 

of linkage between” the foreign and domestic conduct. 

Without such a link, the plaintiffs’ argument was merely “‘if 

it happened there, it could have happened here.’” Id. at 52. 

Similarly, in Williamson Oil Co. v. Philip Morris USA, 346 

F.3d 1287, 1316–17 (11th Cir. 2003), the Eleventh Circuit 

held that a district court did not abuse its discretion in 

excluding evidence of contemporaneous foreign conspiracies 

involving cigarette manufacturers that were also charged with 

a domestic antitrust conspiracy. The court reasoned that 

without “some palpable tie between these overseas activities 

and [the manufacturers’] pricing actions in the United States, 

the foreign undertakings . . . do not tend to exclude the 

possibility of independent action in the setting of domestic 

cigarette prices.” Id. at 1317. 

We are persuaded by the sensible approach articulated 

by the Areeda treatise and inherent in the reasoning of the 

courts in Elevator and Williamson Oil. A conspiracy 

elsewhere, without more, generally does not tend to prove a 

domestic conspiracy, especially when the conduct observed 

domestically is just as consistent with lawful interdependence 

as with an antitrust conspiracy. To hold otherwise would 

sanction the use of unabashed propensity reasoning—the 

fallacy that “if it happened there, it could have happened 

here”—to prove a domestic conspiracy using evidence of a 

foreign conspiracy. But if two markets are sufficiently similar 

or adjacent and the relevant activities therein are sufficiently 
33

linked or tied in some way, e.g., the people involved in the 

conspiracies are the same or overlapping, it may be 

reasonable to use evidence of a foreign conspiracy to support 

an inference of a domestic conspiracy.

13

Based on our review of the record, we conclude that 

the Plaintiffs have not adequately linked the Canadian 

conspiracy to the purported U.S. conspiracy to justify using 

the former to support an inference of the latter. First, the 

people involved in the Canadian conspiracy are different from

those involved in the purported U.S. conspiracy. Granted, 

Mars Canada and Hershey Canada are subsidiaries whose 

executives report to and receive final approval from U.S. 

executives on certain decisions, including pricing decisions. 

 

13 Our decision in Flat Glass is not to the contrary. 

There we noted in dicta that evidence of a defendant’s price

fixing in a market for original equipment manufacturer glass 

would be relevant to the claim that the same defendant also 

conspired to fix prices in the market for flat glass, a closely 

related but distinct product market in the same geographic 

area. See 385 F.3d at 377–78. The evidence in Flat Glass

involved identical companies and one executive who 

participated in the price-fixing conspiracies in both product 

markets. It is therefore consistent with the rule stated above

because the people and companies involved in both 

conspiracies overlapped. 

Nor does the standard we adopt here conflict with 

Continental Ore Co. v. Union Carbide & Carbon Corp., 370 

U.S. 690 (1962). Continental Ore is inapposite because the 

relevant foreign conduct in that case was part of a single 

conspiracy that “was effectuated both here and abroad,” id. at 

706, and the Plaintiffs do not contend a single conspiracy 

existed here.
34

But the evidence does not show that any U.S. executives were 

involved in the Canadian trade spend or price-fixing 

conspiracies. The evidence instead shows that the 

conspiratorial conduct occurred in Canada when Canadian 

executives and ITWAL agreed to limit trade spend or raise 

prices in concert, not when they received final approval from 

U.S. executives on price changes. And as for Nestlé USA, the 

case is stronger yet. Nestlé Canada is not a subsidiary of 

Nestlé USA, and Nestlé Canada’s pricing decisions did not 

need Nestlé USA’s approval. 

Second, although the Canadian and U.S. markets are in 

a sense adjacent, they are not adjacent in the same way that 

the New York and New Jersey markets are, to use the 

example from the Areeda treatise. The Canadian Chocolate 

Manufacturers are distinct legal entities operating in a 

different country, and their wrongdoing does not tend to show 

that the Chocolate Manufacturers engaged in similar 

wrongdoing in the United States. Cf. Ins. Brokerage, 618 F.3d 

at 341 n.44 (“[A] subsidiary is a distinct legal entity and is not 

liable for the actions of its parent or sister corporations simply 

by dint of the corporate relationship.”). 

Third, the circumstances surrounding the Canadian 

conspiracy are markedly different from the purported U.S. 

conspiracy, and comparing the two reveals gaping holes in 

the Plaintiffs’ proof in this case. In Canada, ITWAL played a 

primary role in instigating, organizing, and facilitating the 

Canadian conspiracy; the Plaintiffs here identify no similar 

U.S. player. In Canada, the conspiracy involved concerted 

action on trade spend in addition to price fixing; the purported 

U.S. conspiracy only involved price fixing. In Canada, the 

Canadian Chocolate Manufacturers’ most senior executives

exchanged pricing information and agreed to fix prices, see, 

e.g., J.A. 14106 (describing a November 22, 2007, telephone 
35

call between a Nestlé Canada executive and a Hershey 

Canada executive in which the Hershey Canada executive 

promised that Hershey Canada would follow a Nestlé Canada 

price increase); J.A. 11817–18 (Sculthorpe of Cadbury 

Canada testifying to a meeting with Leonidas of Nestlé 

Canada where Leonidas said Nestlé Canada was raising 

prices and Sculthorpe said Cadbury Canada would follow); 

the Plaintiffs here can point to hardly any communications, 

let alone pricing communications, among the Chocolate 

Manufacturers’ U.S. executives. And in Canada, Cadbury 

Canada’s cooperation with the Canadian Competition 

Bureau’s investigation yielded evidence of conspiratorial 

conduct in Canada; Cadbury’s settlement with the Plaintiffs 

here required cooperation as a condition of the settlement, but 

despite that cooperation, no similar evidence was uncovered

in the United States.

As to the actuation theory, we reject its application 

here for the reasons stated by the District Court.14 The 

actuation theory posits that conspiratorial “conduct and 

outcomes” in Canada facilitated an unlawful U.S. conspiracy.

 

14 We have doubts about the actuation theory and 

whether it unduly blurs an already fine line between lawful 

interdependence and unlawful conspiracies, especially when 

the alleged conspiracy involves price fixing among 

oligopolists supposedly formed by a tacit agreement. “[E]ven 

when each firm rests its own [pricing] decision upon its belief 

that competitors will do the same,” that only shows 

interdependence, not a conspiracy. Clamp-All, 851 F.2d at 

484. But because the District Court concluded that Dr. 

Vellturo’s theory was admissible and the Chocolate 

Manufacturers do not challenge that decision on appeal, we 

reject the theory’s application on its own terms. 
36

J.A. 2192. The theory therefore presumes a factual 

foundation, namely that the U.S. decision makers knew of the 

unlawful conduct in Canada and their knowledge of that 

conduct gave them confidence to raise U.S. prices by a tacit 

or express agreement. See J.A. 2186 (concluding that the U.S. 

price increases were the result “of collusion (either tacit or 

express) that was actuated as a result of information and 

confidence collected by [the Chocolate Manufacturers] on the 

development, execution and conduct of conspiratorial action 

among their Canadian operations”).15

 

15 Dr. Vellturo’s explanation of the actuation theory in 

his report drives home the point. There he opines that before 

2002, the Chocolate Manufacturers were unable to raise 

prices together. Posing a thought experiment, he says to 

“consider a scenario in which U.S. executives from each 

Defendant with pricing authority for both the U.S. and 

Canada fly to a meeting in Canada” and “[w]ithout ever 

uttering an express word regarding U.S. prices, the three 

executives agree to raise prices in Canada by 10%.” J.A. 

2193. The thought experiment continues with the executives 

returning to the U.S. and monitoring the Canadian outcomes, 

and then, without any further communication, one firm 

announces a price increase of 10% in the U.S. Dr. Vellturo 

opines that under these circumstances, the “coordinated anticompetitive agreement in Canada has significantly changed 

the information known about likely responses to a price 

increase in the U.S. by these same companies,” with the price 

leader expecting the other companies to follow the price 

increase. J.A. 2194. This thought experiment presumes not 

only that the conspirators in the U.S. knew of the Canadian 

conspiracy but also that the U.S. conspirators are the same 

people as the Canadian conspirators. 
37

And for good reason. Unless there is direct or 

circumstantial evidence showing that the U.S. Chocolate 

Manufacturers knew of the unlawful Canadian conspiracy, 

the U.S. Chocolate Manufacturers would have no basis to 

know whether the Canadian parallel trade spend reductions 

and pricing were the result of a conspiracy or

interdependence. If we inferred the existence of a U.S. 

conspiracy based on evidence that only shows that U.S. 

 

Moreover, at oral argument, counsel for the Individual 

Plaintiffs clearly explained that Dr. Vellturo premised his 

theory on evidence showing “that the U.S. executives with 

pricing authority at a minimum knew that there was a [sic] 

joint conduct in Canada, [and] at a maximum directed that it 

occur.” Oral Argument at 25:38, available at http://www2.

ca3.uscourts.gov/oralargument/audio/14-

2790InReChocolateConfectionaryAntitrust.mp3.

That being said, Dr. Vellturo backtracked in his 

deposition by asserting that the U.S. Chocolate 

Manufacturers’ awareness of the Canadian conspiracy was 

“not essential to [his] opinion.” J.A. 2529. In that case, we 

acknowledge that the factual prerequisites for this variation of 

the actuation theory—that the Chocolate Manufacturers 

monitored Canadian prices and communicated (lawfully) with 

their Canadian affiliates—are satisfied. But under this variant 

theory, the inference of a U.S. conspiracy is tenuous because 

the U.S. result of parallel pricing is perfectly consistent with 

interdependence. See Areeda & Hovenkamp, supra, ¶ 1422b, 

at 170 (noting that facilitating devices alone do not imply a 

traditional conspiracy because “any parallelism in subsequent 

behavior will often be of the sort that can be satisfactorily 

explained by oligopolistic interdependence alone and without 

regard to the facilitating practice”).
38

executives observed the parallel outcomes in Canada but had 

no knowledge of the cause of those outcomes (a conspiracy or 

interdependence), we would chill lawful conduct. We would 

essentially prohibit an oligopolist from recognizing its

interdependence in a foreign market and applying those 

lessons in a domestic market, even though interdependence at 

home or abroad is lawful under the Sherman Act. If 

interdependence alone is not unlawful, we fail to see how 

evidence that effectively shows “interdependence squared” 

suddenly would create a reasonable inference of a U.S.

conspiracy. Therefore, for the actuation theory to make a 

meaningful dent in the Plaintiffs’ burden, they must show 

more than similar outcomes in Canada and the United States; 

they must instead show that the unlawful Canadian conduct

actuated, facilitated, or informed the U.S. conduct.

16

The District Court correctly found factual support for 

the actuation theory lacking in this case, either in the form of 

the U.S. Chocolate Manufacturers’ direct participation in or 

knowledge of the Canadian conspiracy. First, the theory finds 

no support in a 2007 email from Humberto Alfonso, a U.S.-

based Hershey executive, connecting Eric Lent, the new 

General Manager of Hershey Canada, with Schulthorpe, 

Cadbury Canada’s President. In the email, Alfonso wrote, “In 

keeping with the good advice from ‘The Godfather,’ keep 

close to your competition.” J.A. 8380. Because Alfonso 

participated in the 2007 U.S. pricing decision, and perhaps 

also because he appears to have referenced the sinister words 

 

16 To the extent Dr. Vellturo’s opinion is based only on 

similar outcomes, see supra note 15, it is insufficient on its 

own to create a reasonable inference of a conspiracy.
39

of Michael Corleone from The Godfather Part II,

17 the Direct 

Purchaser Class wants us to infer something more sinister 

from this social introduction—that Alfonso encouraged or 

facilitated the Canadian conspiracy. But social contacts 

between competitors without more are not unlawful. See Baby 

Food, 166 F.3d at 133. Without anything else to suggest 

Alfonso’s further involvement in the Canadian conspiracy, 

and with Alfonso’s sworn declaration that he sent the email 

only as a social introduction and lacked knowledge of the 

Canadian conspiracy, see J.A. 12996–97, we cannot read this 

email as anything other than a social introduction.

Nor does Leonidas, CEO of Nestlé Canada, establish 

the necessary link between the Canadian and U.S. markets. 

According to the Plaintiffs, Leonidas played a key role in the 

Canadian conspiracy and regularly interacted with U.S. 

executives, including with Nestlé USA’s team when Nestlé 

considered buying Hershey in 2002. But this purported 

common player did not have pricing authority for the U.S. 

market and none of Leonidas’s documented communications 

with U.S. executives hinted at illegal conduct in Canada, 

leaving a significant gap in the inferences the Plaintiffs ask us 

to draw to connect the two conspiracies. 

A set of emails from Hershey Canada executives to 

Hershey executives in the U.S. is also not enough. In 2003, 

Bruce Brown, Hershey Canada’s General Manager, emailed 

Burt Snyder, the Interim President of Hershey International, 

shortly after Nestlé Canada initiated a price increase. 

Speaking of the Canadian market, Brown said he had “some 

intelligence” that “[Mars] is anxious to follow [Nestlé’s] price 

 

17

“My father taught me . . . keep your friends close, 

but your enemies closer.” The Godfather Part II (Paramount 

Pictures 1974).
40

increase but would rather have Hershey or Cadbury announce 

ahead of them.” J.A. 7174. Brown went on to call Cadbury 

“the wild card” because he had heard rumors of Cadbury 

taking a price increase but also of Cadbury offering deep 

discounts to certain stores. Id. Snyder responded by 

approving the proposed price increase. In 2005, Brown 

emailed J.P. Bilbrey, the President of Hershey International, 

to say Brown “had heard rumours swirling around about a 

potential competitive price increase (Nestl[é]/Cadbury) in 

Canada . . . and had it confirmed last week, although details 

are sketchy.” J.A. 8316. And in October 2007, following a 

meeting between Hershey Canada General Manager Lent and 

Leonidas where Leonidas told Lent that Nestlé Canada would 

be increasing prices, J.A. 11941, an email circulated among 

Hershey executives in the U.S., noting that “[Lent] knows 

Nestl[é]’s [p]ricing in Canada, and hears [Mars/Cadbury] 

following,” and that Cadbury Canada and Nestlé Canada had 

“floated” price increases. J.A. 8421–22. The October 2007 

emails, however, made no reference to the meeting between 

Lent and Leonidas.

Even assuming the Plaintiffs are correct that an 

inference could be drawn from these emails that some 

Hershey executives in the United States were aware of the 

Canadian conspiracy (an inference better supported by some 

emails than others), that is all they show; they say nothing 

about what Mars and Nestlé USA knew. Indeed, the record is 

devoid of evidence showing that Mars and Nestlé USA knew 
41

of the Canadian conspiracy.

18 Even if the Canadian 

conspiracy informed Hershey’s unilateral actions, it could not 

have facilitated a U.S. conspiracy if two of the three 

purported conspirators (including Mars, the price leader in all 

three instances) were unaware of the Canadian conspiracy.

In sum, under any of the theories presented by the 

Plaintiffs, there must be a sufficient factual basis for the 

Canadian conspiracy to be relevant to or facilitative of the 

purported U.S. conspiracy. Because such evidence is lacking, 

 

18 A September 2005 email from Don Robinson, 

President of Mars Canada, to Robert Gamgort, President of 

Mars North America, does not show that Mars executives in 

the U.S. knew of the Canadian conspiracy. In that email, 

Robinson said that “an industry wide price increase has been 

rumoured for a few weeks” and reported the price increases 

already taken and being taken by Mars Canada’s competitors. 

J.A. 1395. Unlike the aforementioned 2003 Brown to Snyder

email, for example (which suggested that Hershey Canada 

contemplated a coordinated response to a Nestlé Canada price 

increase with its rivals), this Mars email does not include 

information that tends to show a Canadian conspiracy. 

Nor does a March 2002 email from Frank Higgins, 

Vice President of Marketing for Nestlé USA, to other Nestlé 

USA executives show that Nestlé USA knew of the ongoing 

Canadian conspiracy. In that email, Higgins reported on a 

Hershey Canada price increase and promised he would “get[] 

more information from Nestl[é] Canada to assess the 

likelihood that they will increase prices in the US.” J.A. 7394. 

This email shows that Nestlé USA monitored outcomes in 

Canada but says nothing of whether Nestlé USA knew the 

price increases there were the result of interdependence or a 

conspiracy. 
42

the contemporaneous Canadian conspiracy does not support a 

reasonable inference of a U.S. conspiracy, and we move on to 

consider other traditional conspiracy evidence.

2. Possession of advance pricing 

information

The Plaintiffs also highlight evidence that they argue 

shows that the Chocolate Manufacturers exchanged pricing 

information before they publicly announced the price 

increases. Specifically, the Plaintiffs point to an internal 

Hershey document from 2002 reflecting that Hershey knew as 

early as September 2002 that “Mars [wa]s considering a price 

increase due to rising cocoa costs,” J.A. 5300, even though 

Mars did not publicly announce a price increase until 

December. According to the Direct Purchaser Class, only a 

small group of Mars senior executives knew about the 

planned price increase in September, and Hershey reacted by 

changing its internal pricing system in anticipation of a price 

increase, both of which, the Direct Purchaser Class argues,

support an inference that the information was more than 

rumor and came from Mars executives. Hershey insists that it 

did not obtain the information from Mars, citing an internal 

pricing presentation from October 2002 stating that “[third] 

party cocoa suppliers believe Mars will soon take a price 

increase.” J.A. 4606. That Hershey had advance warning of

Mars’s price increase is further supported, the Plaintiffs 

contend, by a memo from Hershey CEO Lenny to the 

Hershey board stating that the Mars 2002 price increase was 

“roughly in line with expectations,” J.A. 4620.

Additionally, the Direct Purchaser Class points to a 

2004 Hershey memo, again from Lenny to the Hershey board,

stating that Hershey “received confirmation that both Mars 

and Nestl[é] have also raised their prices on loose bars.” J.A. 
43

5276. Lenny’s statement came two days before Nestlé USA 

publicly announced its price increase. According to the 

Hershey vice president who passed the information about 

Nestlé USA’s price increase on to Lenny, the information

came from a customer, not Nestlé USA. See J.A. 12999. 

The “mere possession of competitive memoranda” is 

not evidence of concerted action to fix prices. Baby Food, 

166 F.3d at 126. In Baby Food, the plaintiffs also relied on 

the defendants’ possession of documents that contained 

competitor pricing information in advance of any public 

announcements. Low-level employees gathered some of the

information, but the defendants provided no explanation as to 

how they obtained other information. Still, we decided that 

this evidence did not support the plaintiffs’ conspiracy claim. 

Id. For information that came from low-level employees, we 

viewed it as less worrisome than if it had come from upperlevel executives. Id. at 125–26 & n.8. We also insisted on 

proof that such information “had an impact on pricing 

decisions.” Id. at 125. Even for the advance information from 

unexplained sources, we noted that “it makes common sense 

to obtain as much information as possible of the pricing 

policies and marketing strategies of one’s competitors.” Id. at 

126.

In Flat Glass, we distinguished Baby Food and held 

that the evidence showing possession of advance pricing 

information supported an inference of conspiracy. The 

evidence in Flat Glass showed that the information 

exchanges occurred among the conspiring companies’ upper 

ranks and that the exchanges affected prices. See 385 F.3d at 

369 (citing example of a fax from one competitor to another 

revealing the sender’s planned price increase and noting that

the fax recipient announced an identical price increase before 

the fax sender). We summarized the evidence:
44

[H]ere the exchanges of information are more tightly 

linked with concerted behavior and therefore they 

appear more purposive. Several of the key documents 

emphasize that the relevant price increases were not 

economically justified or supportable, but required 

competitors to hold the line. Others suggest not just 

foreknowledge of a single competitor’s pricing plans, 

but of the plans of multiple competitors. Predictions of 

price behavior were followed by actual price changes. 

The inference of concerted rather than interdependent 

action is therefore stronger.

Id.

On the spectrum of advance pricing evidence, the 

Plaintiff’s evidence here is much closer to the evidence in 

Baby Food than to the evidence in Flat Glass. The Plaintiffs 

have no direct or strong circumstantial evidence that the 

information came from Hershey’s competitors, much less 

their upper-level executives. The information is also limited 

to advance pricing information and, unlike in Flat Glass, does 

not reveal pricing plans dependent on others following. 

Furthermore, the two-day notice of Nestlé USA’s 2004 price 

increase came after Hershey had already announced its price 

increase, so it is hard to say it affected Hershey’s pricing 

decision. Finally, the record shows that the Chocolate 

Manufacturers’ pricing actions were intended to, and in some 

cases did, catch their rivals by surprise. See J.A. 1261 (Mars 

2002 internal document explaining how Mars leading a price 

increase could “disrupt[] distracted competition”); J.A. 3641 

(Hershey 2004 email from David West stating he was 

“[a]ngry at [him]self” that Hershey did not anticipate Mars’s 

2004 price increase on packaged products); J.A. 5274 (Mars 
45

2007 email from Gamgort praising Mars’s 2007 price 

increase as brilliantly timed because it “caught [Hershey] and 

[Nestlé USA] totally by surprise”). 

In sum, gathering the price information of competitors 

can be just as consistent with lawful interdependence as with 

a price-fixing conspiracy. See Baby Food, 166 F.3d at 126.

The evidence summarized above does not support an 

inference of a conspiracy.

3. Opportunity and improper 

communications

The Plaintiffs also contend that the Chocolate 

Manufacturers had opportunities to conspire during the 

proposed sale of Hershey and at trade show meetings. The 

Plaintiffs’ evidence is essentially that the executives from the 

Chocolate Manufacturers were in the same place at the same 

time, which is insufficient to support a reasonable inference 

of concerted activity. See Petruzzi’s, 998 F.2d at 1235. Even 

if we assume that Nestlé USA learned of Hershey’s 

commodities cost coverage during the 2002 sale process 
46

(which is far from clear),19 there is nothing to suggest that 

Hershey and Nestlé USA used the sale process to hatch a 

price-fixing conspiracy, especially because Mars, the price 

leader in 2002, was uninvolved in the sale process. This 

evidence of mere opportunities to conspire stands in stark 

contrast to the evidence of secret meetings and 

communications in the Canadian conspiracy and cannot alone 

support an inference of a conspiracy.

Relatedly, the Direct Purchaser Class argues that there 

is evidence of improper communications among the 

Chocolate Manufacturers’ employees and that these 

communications support an inference of a conspiracy. The 

Class cites (1) a 2004 email between Nestlé USA managers 

showing that a Hershey employee had given a Nestlé USA 

employee information about Hershey’s pricing promotions on 

multipack products, J.A. 9270; (2) a January 2007 email 

between two Mars sales executives about a conversation with 

a Hershey manager and information learned about Hershey’s 

 

19 Compare J.A. 7105 (2002 Hershey internal 

document explaining that “the bidders conducted extensive 

due diligence reviews and were provided with additional 

information as requested (in some instances for competitive 

and regulatory reasons only certain non-operational personnel 

of potential bidders were provided information)”), and J.A. 

13295–96 (Direct Purchaser Class’s expert acknowledging 

the complete lack of record evidence showing that either 

Nestlé S.A. or Nestlé USA received information about 

Hershey’s commodities cost coverage), with J.A. 12843–45 

(Cadbury officer acknowledging that Cadbury received 

information about Hershey’s commodities cost coverage in an 

email from an investment banker working for Hershey during 

the sale process).
47

promotional activities, J.A. 9269; and (3) a September 2007 

email between Mars executives relaying that one had 

obtained information about costs from his counterpart at 

Hershey, J.A. 9267. These sporadic communications among 

individuals without pricing authority are insufficient to create 

a reasonable inference of a conspiracy. See Baby Food, 166 

F.3d at 125. Moreover, the September 2007 communication 

occurred after the 2007 price increase, so it could not have 

affected the relevant pricing decisions. Accordingly, we will 

not infer a conspiracy from this evidence. 

4. Departure from pre-conspiracy 

conduct 

The Plaintiffs argue further that the Chocolate 

Manufacturers departed from their pre-conspiracy conduct by 

deciding to follow price increases during the conspiracy 

period and that this is traditional conspiracy evidence. For a 

change in conduct to create an inference of a conspiracy, the 

shift in behavior must be a “radical” or “abrupt” change from 

the industry’s business practices. Toys “R” Us, Inc. v. FTC, 

221 F.3d 928, 935 (7th Cir. 2000). The Plaintiffs have failed 

to show such a shift here.

First, the Plaintiffs’ argument is not premised on an 

apples-to-apples comparison. To show a shift in conduct, the 

Plaintiffs rely on a “failed” September 2001 price increase on 

packaged candy initiated by Hershey. Instead of following the 

price increase, Mars responded by reducing its weight on 

M&M packaged candy and maintaining prices, but three 

months later, Mars raised prices on miniatures packaged 

chocolate candy. J.A. 6192–93. The Plaintiffs also cite a 

January 2002 proposed price increase by Hershey on certain 

boxed chocolates that Hershey rescinded when it received 

pushback from customers. By contrast, the 2002 and 2007
48

parallel price increases involved only singles and kings, and 

the 2004 parallel price increases involved singles and kings as 

well as packaged candy. In fact, the Chocolate Manufacturers 

did not exactly follow each other on packaged products in the 

2002 price increases, lending further support to the notion 

that different considerations factored into the pricing 

decisions for immediate consumption products and future 

consumption products. Putting aside the fact that Mars 

actually responded to Hershey’s 2001 price increase and did 

not simply stand pat, the “failed” price increases in 2001 and 

early 2002 involved different products at different times than 

the parallel price increases in 2002, 2004, and 2007. 

Second, the focus of the Plaintiffs’ argument is unduly 

narrow. Historically, parallel pricing in the U.S. chocolate 

market has not been at all uncommon. See J.A. 1087 

(detailing parallel pricing in 1981 and 1983); J.A. 1105–06 

(detailing a 1979 weight reduction on singles initiated by 

Hershey and matched by Mars; a 1986 price increase on 

singles, kings, and six packs initiated by Mars and matched 

by Hershey; a 1991 price increase on singles, kings, and six 

packs initiated by Hershey and matched by Mars; and a 1995 

price increase on singles, kings, and six packs initiated by 

Hershey and matched by Mars and Nestlé USA). Moreover, 

after the alleged conspiracy period, the Chocolate 

Manufacturers have raised prices in parallel three other times. 

J.A. 2866–67. The Plaintiffs do not argue that all of these 

parallel price increases resulted from an unlawful conspiracy, 

so we fail to see why we should infer a conspiracy existed 

between 2002 and 2007 from behavior that is in fact 

consistent with how this industry has historically operated. 

Third, it is generally unremarkable for the pendulum in 

oligopolistic markets to swing from less to more

interdependent and cooperative. See Areeda & Hovenkamp, 
49

supra, ¶ 1431a, at 229 (noting that the degree of 

interdependence “may be either weak or strong and may vary 

from time to time within a given market”).

Accordingly, the evidence presented by the Plaintiffs 

does not show an abrupt shift in behavior that can support a 

reasonable inference of a conspiracy. 

5. Pretextual explanations for price 

increases

Finally, we address the Plaintiffs’ argument that the 

Chocolate Manufacturers’ pretextual explanations for their 

price increases support a reasonable inference of a 

conspiracy. See Fragale & Sons Beverage Co. v. Dill, 760 

F.2d 469, 474 (3d Cir. 1985) (recognizing that pretextual 

explanations for disputed conduct “would disprove the 

likelihood of independent action”). The Chocolate 

Manufacturers publicly explained their price increases by 

citing rising costs. The Plaintiffs contend these cost-based 

explanations were cover for the real reason—to advance a 

price-fixing conspiracy. 

The same evidence that we credited earlier as showing 

that cost increases did not justify the price increases does not 

necessarily show pretext, i.e., that the Chocolate 

Manufacturers lied when they gave their cost-based 

explanations for their price increases. The Plaintiffs 

acknowledge that raw materials costs went up during this 

period; they simply dispute whether the increases were 

enough to justify the price increases. See J.A. 13892 (Tollison 

Report) (acknowledging that “cocoa prices did rise during the 

class period”); J.A. 6273–74 (same). Nor do the Plaintiffs 

dispute that other input costs, such as labor and energy costs, 

increased during this period. 
50

Moreover, contemporaneous internal documents show 

that some who worked for the Chocolate Manufacturers were 

concerned about cost increases during the conspiracy period. 

See, e.g., J.A. 1031 (Nestlé USA 2002 internal document 

suggesting budget revisions “due to increased cocoa prices”); 

J.A. 1261 (Mars 2002 internal document proposing price 

increase in December 2002 in part because of “emerging 

material cost pressures” and because of belief that “all” the 

Chocolate Manufacturers “will likely face significant cost 

pressures in 2003”); J.A. 7649 (September 2002 email from 

Hershey’s David West noting “organizational momentum 

around pricing behind commodity prices,” but expressing 

disagreement with that organizational view); J.A. 1114 (citing 

March 2003 Hershey annual report that expressed concern 

about cocoa costs going up in 2004). But see, e.g., J.A. 4619 

(October 2002 report from Hershey CEO Lenny to the 

Hershey board explaining cost coverage on cocoa through 

2004); J.A. 7906 (December 2004 email from Hershey CEO 

Lenny discussing how to publicly explain the 2004 price 

increase given Hershey’s “outspoken[ness] about [Hershey’s] 

‘coverage’ on cocoa and to a lesser extent on all input costs”). 

Therefore, to the extent the Plaintiffs’ pretext argument is that 

costs were going up but not enough to justify a price increase, 

their showing of pretext is weak.

But even if the evidence of pretext were stronger, it 

would still be insufficient to survive summary judgment 

because pretext alone does not create a reasonable inference 

of a conspiracy. See Miles Distribs., Inc. v. Specialty Constr. 

Brands, Inc., 476 F.3d 442, 452 (7th Cir. 2007) (“[W]e hold 

that [pretextual reasons] are insufficient to create a genuine 

issue of fact without other evidence pointing to a price-fixing 

agreement.”); DeLong Equip. Co. v. Washington Mills 

Abrasive Co., 887 F.2d 1499, 1514 (11th Cir. 1989) (citing 
51

Fragale, 760 F.2d at 474) (same); H. L. Moore Drug Exch. v. 

Eli Lilly & Co., 662 F.2d 935, 941 (2d Cir. 1981) (“[T]he 

mere fact that a business reason advanced by a defendant for 

its [action] is undermined does not, by itself, justify the 

inference that the conduct was therefore the result of a 

conspiracy.”). 

Requiring something more than pretext to survive 

summary judgment makes particular sense in cases like this 

one. In their pretext argument, the Plaintiffs rely on the same 

evidence they did in arguing that the Chocolate 

Manufacturers acted contrary to their interests—evidence 

which we have already said is insufficient to defeat summary 

judgment. That evidence is also insufficient here. That rising 

costs may not have been the full or even real reason for 

increasing prices does not show whether the real reason was 

interdependence or a conspiracy. Therefore, allegations of 

pretext must be accompanied by other traditional conspiracy 

evidence or economic evidence to create a reasonable 

inference of a conspiracy. Because such other evidence is 

lacking here, any evidence of pretext is insufficient to 

preclude summary judgment. 

D. Summary of the Evidence as a Whole

Considering the evidence as a whole, the Plaintiffs 

have failed to create a reasonable inference that the Chocolate 

Manufacturers more likely than not conspired to fix prices in 

the U.S. chocolate market. Compared to other cases where we 

decided that summary judgment should not have been 

granted, the Plaintiffs’ case here is relatively weak. Cf. Flat 

Glass, 385 F.3d at 369 (reversing summary judgment for the 

defendants based in part on evidence about price increases 

that required cooperation of competitors and coordinated 

price increases suspiciously close in time to meetings and 
52

communications involving the conspirators); Petruzzi’s, 998 

F.2d at 1234–37 (reversing summary judgment for the 

defendants based on witness testimony about a “code” among 

the defendants not to compete on existing accounts and about 

discussions of price fixing at trade association meetings; 

taped conversations in which a conspirator told another 

company to “play by the rules”; and economic evidence 

showing that the only rational explanation for the price data 

was an unlawful conspiracy).

Evidence of a disconnected foreign conspiracy, limited 

possession of advance pricing information, mere 

opportunities to conspire without suspect meetings or 

conversations about pricing, conduct that is consistent with 

pre-conspiracy conduct, and a weak showing of pretext do not 

support a reasonable inference of a conspiracy. Granted, we 

held that some of this evidence individually was insufficient

“without more,” but taken together, the aforementioned 

evidence does not provide the necessary “more” to survive 

summary judgment. In short, all of this evidence is as 

consistent with interdependence as with a conspiracy, and as 

such, it does not tend to exclude the possibility that the 

Chocolate Manufacturers acted lawfully. 

Although our analysis does not exactly mirror the 

District Court’s, we agree with the District Court’s 

conclusion: the evidence in this case calls for summary 

judgment in favor of the Chocolate Manufacturers. 

V.

For the foregoing reasons, we will affirm the District 

Court’s summary judgment.