Opinion ID: 543660
Heading Depth: 3
Heading Rank: 2

Heading: Post-Container contacts

Text: 77 The appellants point to a number of items of evidence which they claim indicate that direct verbal contacts concerning pricing continued to occur after the decision in Container. In their intitial pretrial brief below, the appellants asserted that although such contacts were reduced after Container, they were not eliminated, and they remained an important supplement to the alternative methods of data dissemination that were tried and perfected in the post-Container period. 78 The appellants refer to several instances of direct evidence of competitors contacts after Container, some of which concededly involved discussion of price information, and others of which the appellants claim support an inference that prices were discussed. For example, the appellants point out that J.F. Rogers testified that, while he was a pricing manager with ARCO in 1971, he spoke with E.H. McGee of Mobil on a few occasions in order to confirm Mobil's dealer allowances. Rogers also stated that he called McGee on a couple of occasions in 1971 in order to confirm preliminary field reports he had received from ARCO employees to the effect that Mobil had withdrawn dealer support and restored its prices. The appellees attempt to belittle this evidence by suggesting that Rogers was a low-level employee and by pointing out that he did not report his contacts with McGee to his superior at ARCO, Mr. Douglas. 79 With regard to the appellees' contention that Rogers was too low-level an employee to be of significance, we see no reason for concluding that such information gathering cannot be delegated to subordinates. Accordingly, the fact that Rogers did not himself have authority to make ARCO pricing decisions is not dispositive. At any rate, an argument concerning the relative significance of Rogers' testimony in light of his position in ARCO's overall chain of command seems more appropriately addressed to a jury than to a summary judgment court. Furthermore, examination of Rogers' testimony indicates that although he claimed that he did not tell Douglas the source of his information concerning restorations, Rogers testified that he did convey to Douglas the substance of the information obtained: 80 Q. Did you report to Mr. Douglas in these instances that you had received confirmation from McGee that Mobil had restored? 81 A. No, sir. 82 Q. Why not? 83 A. Well, I--I didn't think it was necessary for one thing. I--I could--I could report that Mobil had--had restored and I--and I'd already had a preliminary field report, so I was comfortable in reporting it to him a few hours earlier than I would have otherwise. 84 Rogers claimed that these contacts only shortened by a few hours the time in which he could report a Mobil restoration, suggesting that the significance of such contacts was of negligible importance. However, a memorandum written by Rogers to Douglas in late 1971 suggests that such contacts were an important means of verifying or ascertaining whether Mobil was restoring its prices. In the memorandum, Rogers noted that [e]ven though Mobil announces a restoration, it is often times hard to detect because of rent considerations which are reflected in lower street prices. 85 The appellants also noted in their pretrial brief that McGee testified that he discussed Mobil's distributor discounts with Herbert Wetzler at some point after the early 1970s. McGee stated that he knew that Wetzler wanted such information as a pricing consultant, although he also stated that he did not know for whom Wetzler was consulting. The record indicates that Wetzler was a consultant for Union beginning in late 1971 and lasting throughout the 1970s, and that he also did some consulting work for Lerner Oil Co., Powerine Oil Co., and the Lundberg Surveys. In addition to the conversations with McGee, Wetzler testified that he spoke with Frank White of Mobil concerning general market intelligence. Wetzler also testified that, although he did not have a specific recollection, he may have discussed some retail prices with Nerheim after Container. Wetzler stated that his understanding of Container was that, although he and Nerheim could not discuss their own companies' prices or future prices of any sort, they could discuss past or present prices of other competitors. Although, as the appellees note, Nerheim denied having such conversations, we are required to view the evidence in the light most favorable to the appellants. 86 The appellants also point to a memorandum from V.T. Chamberlain to Mr. McGee, which described the results of a Mobil survey of competitor publication practices in the Phoenix area. The memorandum states that pricing information is available at the Texaco plant here in Phoenix. An asterisk is penciled in after the word the in this sentence, and the following handwritten comment appears in the margin under a corresponding asterisk: Not Posted but available on pers. req. One could reasonably infer from this statement that Texaco continued to respond to direct personal requests for dealer price information. Indeed, the appellees' only response to this contention is to argue that any such provision of information by Texaco was innocent because the information provided was public. For the reasons outlined in Section III-B-1, supra, this argument is unavailing. 87 Lastly, the appellees claim that these items of evidence are too anecdotal and fragmentary to support a broad inference of conspiracy of the sort alleged here. Were these items of evidence standing alone, we might be inclined to agree. At the very least, we note that the appellants' evidence of direct competitor contacts is substantially less impressive for the post-Container period than for the pre-Container period. Nonetheless, we conclude that, in light of the evidence concerning the appellees' shift to different methods of price data dissemination and the evidence indicating similar patterns of price restorations during the pre- and post-Container periods, this evidence supports the appellants' limited claim that direct competitor contacts remained an occasional, although less frequently employed, method of circulating information concerning dealer discounts and supported price levels. 17 Indeed, some of the items discussed above are examples of direct evidence of such contacts. As such, we are not free to discredit them on summary judgment. McLaughlin, 849 F.2d at 1207-08. 18 88 The appellants also claim that the existence of direct verbal contacts after Container may be inferred from various items of evidence which they claim indicate that the appellees had advance notice of price changes. In particular, the appellants point to a log kept by W.B. Lovell, a pricing clerk for Standard. The log contains several entries indicating that on a number of occasions Lovell was aware of restoration moves in advance of their effective date. In addition, an ARCO memorandum from Rogers to Douglas indicates that ARCO had obtained advance information concerning Shell's dealer aid levels from always reliable sources. 89 The district court considered this evidence to be of little value because it did not disclose the manner in which Standard had obtained such information. Petroleum Prods., 656 F.Supp. at 1301. For example, the July 26, 1971 Lovell log entry stated that Ag Nerheim called to inform us of the possibility of Shell returning to normal effective opening of business 7-27-71. Have field watch closely and report any movement to him. The district court noted that [w]e do not know where Mr. Nerheim got his information concerning Shell's impending move, but, in light of the fact that Shell dealers would have been notified of the move in advance, the district court speculated that [i]t may be that Mr. Nerheim saw a Shell dealer changing his price posting sign. Id. The appellants argue that this sort of speculation defies summary judgment law by failing to view the evidence in the light most favorable to the nonmovant. The appellees contend that the district court merely recognized that, under Matsushita, such evidence was insufficient to support an inference of conspiracy. 90 We appreciate the district court's concern over the absence of any evidence indicating the source of this sort of advance information. As the court correctly noted, it is possible that such information might have been obtained through innocent means, such as the direct observation of retail price changes at individual competitive stations. This concern is especially appropriate where, as here, the record indicates that the appellees regularly conducted surveys of the pump prices at competitive stations. Accordingly, were such evidence standing alone, we would be inclined to agree with the district court that, under Matsushita, this evidence does not support an inference of conspiracy. To allow an inference of agreement from such evidence, standing alone, would have the effect of deterring competitors from obtaining information about other companies' actual retail prices, even through legitimate means. We can think of few inferences that would have a more undesirable distorting effect on market conduct. For this reason, as we found with the pricing pattern evidence, this advance notice information may not serve as proof of an antitrust violation without further evidence that is sufficiently unambiguous and tends to exclude the possibility that the appellees acted lawfully. In the present case appellants have proffered such evidence. Given the other items of evidence that we have already described, we perceive no Matsushita problem in permitting the jury to draw a reasonable inference that this advance knowledge was acquired through what are in this case less innocent data dissemination techniques, namely direct competitor contacts or public posting or advance public announcement.