Opinion ID: 1189773
Heading Depth: 4
Heading Rank: 1

Heading: Toledo's Evidence of an Unlawful Agreement Between Mack Dealers

Text: Because § 1 of the Sherman Act by its terms requires concerted action, unilateral activity, no matter what its motivation, cannot give rise to a § 1 violation. Rossi v. Standard Roofing, Inc., 156 F.3d 452, 465 (3d Cir.1998). To show concerted action, a plaintiff must produce evidence that would allow a jury to infer that the alleged conspirators had a unity of purpose or a common design and understanding, or a meeting of the minds. Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984). Regarding the types of evidence which may be used to show that the concerted action requirement is met, we have said that, [w]hile direct evidence, the proverbial `smoking-gun,' is generally the most compelling means by which a plaintiff can make out his or her claim, it is also frequently difficult for antitrust plaintiffs to come by. Thus, plaintiffs have been permitted to rely solely on circumstantial evidence (and the reasonable inferences that may be drawn therefrom) to prove a conspiracy. Rossi, 156 F.3d at 465. Further, to avoid punishing lawful conduct, the Supreme Court has placed certain limits on the inferences that may be drawn from the evidence in antitrust cases. The Court has explained that certain evidentiary restrictions are necessary in antitrust cases since mistaken inferences... are especially costly because they chill the very conduct the antitrust laws are designed to protect. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 594, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Therefore, antitrust law limits the range of permissible inferences from ambiguous evidence in a § 1 case.... [C]onduct as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of antitrust conspiracy. Id. at 588, 106 S.Ct. 1348 (citations omitted). In addition, if the factual context renders the plaintiff's claim implausibleif the claim is one that simply makes no economic sensea plaintiff must come forward with more persuasive evidence to support its claim than would otherwise be necessary. Rossi, 156 F.3d at 466 (quoting Matsushita, 475 U.S. at 587, 106 S.Ct. 1348) (punctuation omitted). Finally, in evaluating whether a genuine issue for trial exists, the antitrust defendants' economic motive is highly relevant. If the defendants had no rational economic motive to conspire, and if their conduct is consistent with other, equally plausible explanations, the conduct does not give rise to an inference of conspiracy. Id. (quoting Matsushita, 475 U.S. at 596, 106 S.Ct. 1348) (punctuation omitted). Nevertheless, we have held that those limits on inferences do not apply to a plaintiff's direct evidence of an unlawful agreement under § 1. [10] Id. In the present case, Toledo presented several pieces of direct evidence for the existence of one or more agreements among Mack dealers not to compete with each other. Because we conclude that Toledo's direct evidence is sufficient to allow a jury to conclude that a conspiracy not to compete existed among Mack dealers, we need not apply the rules restricting inferences drawn from circumstantial evidence. Toledo's first piece of evidence of an agreement not to compete was Yeager's testimony that, in the early 1980s, other Mack dealers told him bluntly that dealers did not compete on price. (App. at A513.) Second, Mack consultant Hallie Giuliano testified that in 1999, Ron Gerhard, a Mack employee, told her that there was a `gentlemen's agreement' among Mack truck dealers that they would sell only in their own AORs ... [but] that some Mack truck dealers did not honor the `gentlemen's agreements' and engaged in efforts in other Mack dealers' territories. (App. at A3537.) Finally, when Jack Lusty, Yeager's district manager from 1998 to 2002, was asked whether some Mack dealers [had] unwritten understandings with other Mack dealers that they wouldn't compete in each other's AOR's, he responded that [t]here werethere were some Mack dealers thatand I've heard them called gentlemen's agreements, where they wouldn't compete in other dealers' areas.... (App. at A2877.) While admitting that the record before us contains statements about agreements between dealers, Mack argues that Toledo's evidence is insufficient to give to a jury because the record does not reveal the exact extent of any such agreements. Viewing the evidence in the light most favorable to Toledo, Mack's argument is unpersuasive. It may well be that Toledo's inability to present the details of any agreement among dealers would leave a jury unpersuaded that such agreements did in fact exist. That, however, is not our inquiry. Instead, we must consider whether the evidence entitles Toledo to place that question before the jury at all. We believe it does. Simply put, Toledo's evidence was sufficient because a jury considering it could believe it and reasonably conclude that agreements not to compete did exist among Mack dealers. [11] The possibility that a jury might not believe the direct evidence does not, in itself, mean that the jury should not consider it. Having concluded that Toledo's evidence was sufficient to show the existence of a non-competition agreement among Mack dealers, we turn to whether the jury could conclude that the agreement was an unreasonable restraint of trade in violation of § 1. When considering the legality of an agreement under § 1, two different methods of analysis may be used, depending upon the nature of the agreement at issue. Certain restraints of trade are per se unreasonable, while others require more searching analysis under the `rule of reason.' Flat Glass, 385 F.3d at 356. Per se restraints are conclusively presumed to unreasonably restrain competition `without elaborate inquiry as to the precise harm [they have] caused or the business excuse for [their] use.' Id. (quoting Rossi, 156 F.3d at 461). The limited categories of agreements subject to per se treatment include horizontal price-fixing-i.e., where competitors at the same market level agree to fix or control the prices they will charge for their respective goods or services.... Id. (citations and internal punctuation and quotation marks omitted); see also Leegin, 127 S.Ct. at 2717 (A horizontal cartel among ... competing retailers that ... reduces competition in order to increase price is, and ought to be, per se unlawful.). It is readily apparent that, if there were an agreement among Mack dealers as alleged, it involved horizontal competitors colluding to control prices and, therefore, would be per se unlawful. Thus, viewed in the light most favorable to Toledo, the evidence shows a horizontal agreement that violates § 1.