Opinion ID: 4543063
Heading Depth: 2
Heading Rank: 1

Heading: Evaluating the Separate Components of the

Text: Conspiracy With that in mind, we consider first whether the District Court erred in looking at each of the individual components of the conspiracy separately. In arguing that there was error, the plaintiffs rely on Continental Ore Co. v. Union Carbide & Carbon Corp., in which the Supreme Court criticized the court 16 of appeals because it had “approached Continental’s claims as if they were five completely separate and unrelated lawsuits,” rather than all parts of the “basic plan to monopolize the … market[.]’” 370 U.S. 690, 698 (1962). But, as the District Court correctly concluded here, Continental Ore does not require analysis of the distinct components of a conspiracy as if they were an undifferentiated and indistinguishable bunch of behaviors. The Supreme Court’s admonition against “compartmentalizing … various factual components” was given in relation to a lower court’s assessment of the sufficiency of evidence at a trial, and the direction given was definitely not that the various stratagems of an alleged conspiracy must be evaluated under a single standard. Id. at 699. Quite the contrary. As our late colleague Judge Edward R. Becker (then serving as a District Court Judge) cogently explained: In Continental Ore itself, the Supreme Court engaged in a detailed analysis of the record with respect to three of the four ventures which the Court of Appeals had addressed on their facts, concluding with respect to each of the three considered separately that there was enough evidence of causation to preclude a directed verdict. If the warning against “compartmentalizing” an antitrust conspiracy case were meant to prevent a court from breaking down a plaintiff’s allegation of a “unitary” conspiracy into its component parts for purposes of analysis, the Court would not have engaged in 17 the “forbidden” analysis in the very same opinion in which it issued the warning. Zenith Radio Corp. v. Matsushita Elec. Indus. Co., 513 F. Supp. 1100, 1167-68 (E.D. Pa. 1981) (Becker, J.) (citation omitted). The plaintiffs in the present case nevertheless contend that, because they alleged the defendants engaged in a single, overarching conspiracy, all of the defendants’ conduct must be evaluated under a single standard and, given their allegations, it must be the per se standard. The plaintiffs evidently believe that, because they are masters of their complaint, they are also masters of the District Court in deciding the analytical approach to be taken in the case. Their power to dictate analysis and outcome is not what they wish it were. When determining what standard to apply, courts are required to look at the “economic effect rather than [rely] upon formalistic line drawing.” Leegin, 551 U.S. at 887. The plaintiffs’ characterization of the defendants’ conduct – whether as a single overarching conspiracy or as three separate conspiracies – does not determine how a court is to assess differing actions that the defendants are accused of taking. When different stratagems are alleged to have furthered an antitrust conspiracy, the court is free to determine which analytical standard should apply to each. It is possible that different aspects of an alleged conspiracy can have very different economic consequences, and that, accordingly, different standards should apply when assessing whether each has an unlawful anticompetitive effect. Cf. id. at 893 (applying different analytical standards to different parts of an alleged conspiracy, where one part of the alleged conspiracy was 18 horizontal and one was vertical). Were it otherwise, the rule of reason, which is supposed to be the widely applicable standard, could be relegated to the margins. A plaintiff with a bucket full of allegations about behavior rightly subject to the rule of reason could easily, by adding a single allegation of behavior that is anticompetitive per se, demand per se analysis of the whole. The District Court did not err in rejecting that kind of approach. Courts can consider the differing components of an alleged conspiracy separately when determining which mode of antitrust analysis to apply.