Opinion ID: 543660
Heading Depth: 2
Heading Rank: 2

Heading: Direct v. Circumstantial Evidence

Text: 26 Before turning to the specific issues of this case, we must add one further comment with regard to the applicability of Matsushita. As the above analysis demonstrates, the concerns highlighted in Matsushita and Monsanto arise only in the context of whether to permit inferences from circumstantial evidence. Accordingly, the Matsushita standards do not apply when the plaintiff has offered direct evidence of conspiracy. 27 This important limitation on the applicability of Matsushita was emphasized in our decision in McLaughlin v. Liu, 849 F.2d 1205 (9th Cir.1988). In Liu, the Secretary of Labor argued that summary judgment was properly granted, under Matsushita, on the grounds that the defendant's sworn affidavit--which, if believed, would have provided a complete defense as to part of the Secretary's claim--was implausible. Id. at 1207. We emphatically rejected this argument, noting that in Matsushita, the Court was not speaking of direct evidence, but of circumstantial evidence. Id. We noted the important difference between circumstantial evidence, in which a party asks that certain inferences be drawn in his favor and direct evidence, where, in order to defeat a request for summary judgment, the nonmovant need only ask that his evidence be taken as true. Id. at 1208. We emphasized that the cases of both the Supreme Court and this court have honored the difference between weighing direct evidence and refusing to draw unreasonable inferences from circumstantial evidence. Id. We summarized our cases as indicating that Matsushita only applies where the non-movant relie[s] on inferences from circumstantial evidence. Id. We then went on to quote extensively from T.W. Electrical Services, Inc. v. Pacific Electrical Contractors Assoc., 809 F.2d 626 (9th Cir.1987), highlighting that the Matsushita inquiry was appropriate only  '[w]here there is no direct evidence of a conspiracy.'  Id. at 1209 (quoting T.W. Elec., 809 F.2d at 632) (emphasis added by Liu). See also Christofferson Dairy, Inc. v. MMM Sales, Inc., 849 F.2d 1168, 1172 n. 4 (9th Cir.1988) (standards spelled out in T.W. Elec. apply only [i]f there is no direct evidence of a conspiracy). 28 Thus, in applying Matsushita, a court must consider the nature of the evidence that the plaintiffs have offered with respect to each element of the cause of action. If the plaintiffs rely exclusively on circumstantial evidence in order to establish at least one element of their cause of action, then the court must proceed to analyze, under Matsushita, whether the inferences which the plaintiffs seek to draw from the indirect evidence are reasonable and permissible under the governing substantive law. T.W. Elec., 809 F.2d at 631; see also United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 110 S.Ct. 51, 107 L.Ed.2d 20 (1989). In the antitrust field, this inquiry will be guided by the principles outlined earlier. If, however, the plaintiffs offer direct evidence to support each element, then summary judgment must be denied.