Opinion ID: 2832719
Heading Depth: 3
Heading Rank: 1

Heading: Antitrust Conspiracy Claims

Text: The thrust of Appellants’ remaining antitrust claim2 is that from May 24, 2004 to June 23, 2004, Schreiber conspired with DFA to manipulate the price of Class III milk futures on the CME in violation of § 1 of the Sherman Act and California’s Cartwright Act. The district court held that Appellants’ evidence did not present a question for a jury on whether Schreiber conspired to manipulate the price of milk futures by purchasing spot cheese. Appellants argue that they have provided sufficient evidence to survive Schreiber’s summary judgment motion. We review a grant of summary judgment de novo, construing all facts and drawing all reasonable inferences in favor of the nonmoving party. Sojka v. Bovis Lend Lease, Inc., 686 F.3d 394, 397 (7th Cir. 2012). “‘[B]ecause the Cartwright Act is patterned after the federal Sherman Act and both have their roots in the common law, federal cases interpreting the Sherman Act are applicable in construing the Cartwright Act.’” In re Copper Antitrust Litigation, 436 F.3d 782, 802 (7th Cir. 2006) (quoting Oakland-Alameda Cnty Builders’ Exch. v. F.P. Lathrop Constr. Co., 482 P.2d 226, 231 n.3 (Cal. 1971)). Therefore, we will conduct a single analysis for both claims using federal cases interpreting the Sherman Act. Section 1 of the Sherman Act prohibits “[e]very contract, combination … or conspiracy, in restraint of trade or commerce,” 15 U.S.C. § 1, “though courts have long restricted its 2 The district court dismissed Appellants other conspiracy claims against Schreiber—monopolization and attempted monopolization in violation of § 2 of the Sherman Act—earlier in this litigation. 8 No. 14-3239 reach to agreements that unreasonably restrain trade,” Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 705 (7th Cir. 2011). Agreements to fix prices unambiguously fall within the ambit of § 1. Id. To prove a § 1 claim, plaintiffs must prove three things: (1) defendants had a contract, combination, or conspiracy (“an agreement”); (2) as a result, trade in the relevant market was unreasonably restrained; and (3) they were injured. Id. “To show concerted action, antitrust plaintiffs must produce evidence that would allow a jury to infer that the alleged conspirators ‘had a conscious commitment to a common scheme designed to achieve an unlawful objective.’” Id. at 706 (quoting Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984)). The evidence must “reveal ‘a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement.’” Id. (quoting Am. Tobacco Co. v. United States, 328 U.S. 781, 810 (1946)). In sum, Appellants must produce evidence showing there is a genuine issue of material fact as to whether Schreiber’s decision to purchase spot cheese on the CME was made by Schreiber alone, or while acting in concert with DFA. To determine whether summary judgment is appropriate in light of the produced evidence, we use a two-part inquiry. First, we “assess whether [Appellants’] evidence of agreement is ambiguous—that is, whether it is equally consistent with [Schreiber’s] permissible independent interests as it is with improper activity.” Id. at 707. Appellants argue that communications between DFA and Schreiber employees support an inference of conspiracy and tend to rule out an inference of No. 14-3239 9 independent activity. Considering the evidence as a whole, we disagree. Appellants’ evidence highlights “conduct as consistent with permissible competition as with illegal conspiracy,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986), which “does not, standing alone, support an inference of antitrust conspiracy.” Id. Appellants’ core evidence, communications between employees at Schreiber and DFA, could be understood as a part of a legitimate business relationship as readily as they could be understood as a part of a conspiracy. Although the two companies were competitors, DFA was also one of Schreiber’s main suppliers, and Schreiber was one of DFA’s largest customers, giving them a number of legitimate reasons to communicate with each other. Additionally, Appellants have not pointed to a single communication that suggests a meeting of the minds to fix prices. Because we find the evidence of agreement is ambiguous, we now “look for any evidence that tends to exclude the possibility that [Schreiber was] pursuing independent interests.” Omnicare, 629 F.3d at 707; see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554 (2007) (“[P]roof of a § 1 conspiracy must include evidence tending to exclude the possibility of independent action … and at the summary judgment stage a § 1 plaintiff’s offer of conspiracy evidence must tend to rule out the possibility that the defendants were acting independently …” (citations omitted)). Appellants argue that parallel inflation of public market prices and “unusual” parallel conduct are more consistent with agreement than individual action. But this position merely 10 No. 14-3239 reiterates the ambiguity of Appellants’ evidence of agreement and does nothing to diminish the inference of independent action, particularly in light of Schreiber’s evidence; Schreiber has provided voluminous evidence showing that Schreiber’s CME purchasing activity was the result of its own interest in restoring a certain spread between the prices of block and barrel cheese. Without evidence tending to exclude the possibility that Schreiber was pursuing independent interests when it purchased cheese on the CME, Appellants have not raised a genuine issue of material fact as to whether Schreiber conspired with DFA. Therefore, we affirm the district court’s grant of summary judgment in favor of Schreiber on the § 1 Sherman Act and Cartwright Act claims.