Opinion ID: 3011036
Heading Depth: 3
Heading Rank: 1

Heading: Summary of the Evidence: In opposition to the

Text: defendants' motion for summary judgment, the plaintiffs offered deposition testimony concerning their customers. It included testimony of various plaintiffs that certain customers ceased purchasing beer from them after the Beer World stores opened, and that the customers stated that they had done so because the Beer World stores had cheaper beer. The District Court concluded that this testimony was inadmissible hearsay and therefore could not meet the plaintiffs' burden of production to defeat the defendants' motion for summary judgment. Five of the plaintiffs offered testimony concerning customers' behavior and statements. This testimony can be divided into two categories. First, several of the plaintiffs testified that, during the time at issue in this litigation, some people who had formerly been their customers stopped coming to their stores. Carl Altenhof testified that, Retail customers that I had as steady customers, I don't have anymore when Beer World came in . . . . App. at 750. Likewise, Douglas J. Berthold stated in his deposition that, although he could not document his losses, he hadlost forty percent of [his] business, probably most of them are one case purchase customers, some of them two case purchase [sic]. App. at 754. Finally, Kathleen Kapres said that she lost customers, purportedly to Beer World. App. at 819. Second, several of the plaintiffs testified that various customers, some identified and some not, told them that _________________________________________________________________ 10. Given our conclusion that the customer and expert evidence of causation is sufficient, we need not consider the plaintiffs' other arguments for reversing the District Court's conclusion that they had not adduced sufficient evidence of causation: (1) that a price differential permits an automatic presumption of causation of loss to those who pay the higher price, see Bogosian v. Gulf Oil Corp., 561 F.2d 434, 455 (3d Cir. 1977), and (2) that the defendants' own statements and admissions constitute proof of causation. 22 they no longer shopped at the plaintiffs' stores because of the Beer World stores' operations. Berthold testified that one customer, David Begg, told him that he was going to shop at Beer World because I like selection and money talks. App. at 755. Kapres also stated that shehad quite a few customers come in and say they wanted the same deal [lower prices] from me or they were just going to buy their beer from [Beer World], and I said I just can't give you that deal. App. at 819. In addition, Paul Kelly identified by name three customers of his who began to buy from Beer World, and discussed at length conversations with one of them in which the customer revealed that he was going to Beer World because of the prices. App. at 822-27. As noted previously, the defendants contend that the plaintiffs have presented evidence of antitrust violations at most during a fairly brief period of time, for which only some of the customer evidence is relevant. The District Court did not consider this issue and, as we have stated, neither will we. Instead, we assume that the plaintiffs can establish antitrust violations throughout the relevant period. On remand, the District Court will have to analyze the extent of the defendants' antitrust violations and then determine whether the plaintiffs' evidence of loss and causation remains sufficient in light of the more specific temporal scope. If it appears that the defendants did not engage in antitrust violations during some of the relevant period, the District Court is free to revisit the question whether the plaintiffs' proof of causation remains sufficient. 2. Admissibility: The District Court, rely ing on our decision in Stelwagon Manufacturing Co. v. Tarmac Roofing Systems, Inc., 63 F.3d 1267 (3d Cir. 1995), held this evidence inadmissible, finding that the plaintiffs' testimony concerning their customers' statements was inadmissible hearsay. It also noted that, although this litigation has been proceeding for some six years, the plaintiffs had not taken the simple step of obtaining affidavits from customers concerning their reasons for ceasing to purchase beer from the plaintiffs. We disagree with the District Court's reading of Stelwagon. In Stelwagon, the plaintiff proffered the testimony of its employees concerning the statements of their customers. 23 The employees proposed to testify, based on out-of-court conversations with Stelwagon customers . . . that the customers could and did purchase Tarmac MAPs from 780 Standard at prices lower than Stelwagon's prices. Stelwagon, 63 F.3d at 1274. The plaintiff argued that this testimony was admissible to prove fact of damage, i.e., both loss and causation, under Federal Rule of Evidence 803(3), which provides: The following are not excluded by the hearsay rule, even though the declarant is available as a witness:. . . A statement of declarant's then existing state of mind, emotion, sensation, or physical condition (such as intent, plan, motive, design, mental feeling, pain, and bodily health), but not including a statement of memory or belief to prove the fact remembered or believed unless it relates to the execution, revocation, identification, or terms of declarant's will. Fed. R. Evid. 803(3). In Stelwagon, the plaintiff offered the customers' statements to prove, not only causation, i.e., the reason it lost business -- for which purpose it would be admissible evidence of motive under Rule 803(3) -- but also loss, i.e., the fact that it lost business to the defendants. We concluded that the customers' statements about why they purchased from Standard was inadmissible to prove that they actually did so. See 63 F.3d at 1274 (Statements that are considered under the exception to the hearsay rule found at Fed. R. Evid. 803(3) . . . cannot be offered to prove the truth of the underlying facts asserted. (footnote omitted)). As we have explained,  `[s]tatements of a customer as to his reasons for not dealing with a supplier are admissible for this limited purpose,' i.e., the purpose of proving customer motive, but not as evidence of the facts recited as furnishing the motives. J.F. Feeser, Inc. v. Serv- A-Portion, Inc., 909 F.2d 1524, 1535 n.11 (3d Cir. 1990) (quoting Herman Schwabe, Inc. v. United Shoe Mach. Corp., 297 F.2d 906, 914 (2d Cir. 1962)). We think that the District Court's dismissal of the plaintiffs' evidence on the basis of Stelwagon was inappropriate. The purpose for which the customers' 24 statements are offered in this case differs in substance from the purpose for which the court in Stelwagon found them inadmissible. In that case, the only evidence of actual loss, i.e., that customers stopped purchasing from the plaintiff, was the employees' reports that customers had said that they were no longer buying from the plaintiff because the plaintiff 's competitors had lower prices. We concluded that this evidence could not be used to prove such loss. While the plaintiffs here have also offered similar testimony that their customers told them that they were purchasing beer from the Beer World stores and not the plaintiffs, they offer it only for the [limited] purpose of proving customer motive, for which purpose we found such evidence admissible under Rule 803(3). Stelwagon, 63 F.3d at 1274.11 _________________________________________________________________ 11. The defendants also complain that, even if the testimony is otherwise admissible under Rule 803(3), it is not admissible, particularly for use at the summary judgment stage, because the declarants are unidentified or inadequately identified. First, the defendants contend that this means the evidence cannot meet the plaintiffs' burden to defeat a motion for summary judgment because it is not in an admissible form. See Fed. R. Civ. P. 56(e) (Supporting and opposing affidavits [introduced at the summary judgment stage] . . . shall set forth such facts as would be admissible in evidence . . . .); Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1234 n.9 (3d Cir. 1993) (noting that evidence introduced to defeat a motion for summary judgment must be capable of being admissible at trial). In particular, the defendants argue that, since the declarants are unidentified, there is no way to ensure that they will be able or willing to testify at trial. We need not consider this issue, however, because the statements are admissible hearsay as discussed in the text. Moreover, contrary to the defendants' apparent suggestion, we do not think that the fact that the declarants are not specifically identified is relevant for determining whether their statements fall within the Rule 803(3) hearsay exception. The defendants cite Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996), for the proposition that a hearsay statement by an unidentified or unknown personis not `capable of being admissible at trial.'  Philbin, 101 F.3d at 961 n.1 (quoting Petruzzi's, 998 F.2d at 1234 n.9). Philbin is distinguishable, however. The plaintiff in that case relied on the statement of an unidentified official of the defendant as direct evidence of the defendant's allegedly unlawful motive in a Fair Credit Reporting Act suit. The declarant's identity was important to ensure that he or she was in fact an official of 25 In addition, however, the record contains other nonhearsay evidence of a type not before the court in Stelwagon, that the plaintiffs offer to prove the fact of loss, the issue for which the court in Stelwagon found the customers' statements inadmissible. Here, the plaintiffs themselves testified that they knew of customers who used to purchase beer from them, but no longer did. This is direct evidence of an actual loss of customers. Although in Stelwagon we held that customers' hearsay statements were not admissible to prove lost business, the plaintiffs' own testimony about the actual behavior of their customers is not hearsay. Rather, it is admissible evidence of lost business, although not of the reason therefore. Thus, in the present case, the plaintiffs' testimony that certain customers no longer purchased beer from them, coupled with their testimony concerning the customers' statements of their motive, which is admissible hearsay under Rule 803(3), are together evidence of the fact of damage. _________________________________________________________________ the defendant company whose statement would be admissible nonhearsay under Fed. R. Evid. 801(d). Identity was a critical element of admissibility. The customers' statements in this case, however, are different. In a practical sense, their identities are not important. The relevance of their statements depends only on the fact that they were the plaintiffs' customers, not their particular identities. Furthermore, we do not think that the admissibility of their statements under the Rule 803(3) hearsay exception depends on their being identified. Knowing the specific identity of the declarant will not make the statements more trustworthy evidence of the declarants' descriptions of their states of mind, the primary concern in interpreting hearsay exceptions. In United States v. Mitchell, 145 F.3d 572, 576-77 (3d Cir. 1998), we held that the identity of the declarant is a substantial, although not determinative, factor in determining whether a hearsay statement is admissible under the present sense impression or the excited utterance exceptions to the hearsay rule. The proposed evidence in that case was an anonymous note purportedly identifying a getaway car. We held that the note was not admissible as a present sense impression or excited utterance because there was no evidence that the unidentified declarant personally perceived the event or condition about which the statement is made. With respect to a state-of-mind statement, however, it is only important that the declarant be the person whose state of mind the statement concerns, which is true by definition. 26 3. Sufficiency of the Evidence to Prove Causation: The next question is whether this evidence is sufficient to defeat a motion for summary judgment. [O]ur jurisprudence does not require the summary judgment opponent to match, item for item, each piece of evidence proffered by the movant, but rather he or she must only exceed the`mere scintilla' standard. Rossi, 156 F.3d at 466 (citations and some quotations omitted). We recently confronted the question of the sufficiency of this sort of evidence of causation in antitrust cases. In Rossi, the plaintiff offered, in opposition to the defendants' motion for summary judgment, the testimony of several potential customers that they would have purchased a certain product from him if he had not been deprived of it in violation of the antitrust laws. We concluded that this evidence was sufficient evidence of fact of damage to defeat a motion for summary judgment: Rossi has proffered evidence from five specific customers that they would have purchased GAF product from Rossi if he had been able to sell it to them, and Rossi's inability to consummate those sales (leading to a loss of business and therefore injury) is a direct result of the alleged antitrust violation-- the group boycott. In addition, Richard Droesch, Rossi's partner in the failed Rossi Florence venture, backed out of that venture at least in part based upon his understanding that the company would not be able to get the products it needed, particularly GAF product, to compete successfully in the market. For all these reasons, we believe that the record supports Rossi's allegations that he suffered antitrust injury, and that it was caused by the defendant's [sic] allegedly unlawful actions. 156 F.3d at 485. We think that Rossi supports the conclusion that the plaintiffs' testimony concerning their customers' actions and statements is sufficient to meet their burden to produce evidence of loss and causation. Initially, we reject the defendants' attempt to distinguish Rossi on the ground that the customers there stated that they would have purchased product from Rossi but for circumstances that were the direct and intended result of 27 the conspiracy. As noted previously, we have had to assume for the purposes of this appeal that the plaintiffs will be able to prove that the defendants violated the antitrust laws. The direct result of these violations would be the Beer World stores' ability to sell beer at a lower price than the plaintiffs, the precise circumstance the customers cited as a reason for their actions. The defendants also submit that Rossi is distinguishable because in this case there was no admissible evidence that the customers purchased beer from the Beer World stores. Of course, the defendants are correct that the testimony at issue is not admissible to prove that the customers purchased beer from the defendants. See Stelwagon, 63 F.3d at 1274. But the plaintiffs do not need to prove that point; in order to establish antitrust liability and damages, all the plaintiffs must show is that they suffered an economic loss as a result of the defendants' antitrust violations; not that the defendants benefitted from that loss directly. See Rossi, 156 F.3d at 464-65 (plaintiff, in order to recover on an antitrust claim, must prove an antitrust violation and that the plaintiffs were injured as a proximate result of that violation (citation omitted)). As long as the plaintiffs can prove that they lost business, and that this loss was a result of the defendants' antitrust violations, they can bring a successful antitrust claim. At all events, Rossi makes no mention of any evidence, or even any requirement, that the customers in that case purchased product from the defendants instead of the plaintiff. See Rossi, 156 F.3d at 485. For all we know, the customers who offered testimony in Rossi simply decided not to purchase GAF product at all, instead of buying it from the defendants. What the customers did instead of purchasing product from the plaintiff is irrelevant, so long as there is evidence that they did not purchase from the plaintiff because of the defendants' antitrust violations. In addition to these points, we also find it significant that neither here nor in Rossi did the customer evidence purport to prove any specific amount of damages. Although the plaintiff in Rossi proffered the testimony of five customers, these customers gave no indication of exactly how much product they would have bought from him if they could. Yet 28 we concluded that the evidence of causation was sufficient. This conclusion was driven by the principle that, on review of a grant of summary judgment, we should focus on whether there is sufficient evidence of fact of damage in general, not on the sufficiency of the evidence of a specific amount of damages. See Rossi, 156 F.3d at 484. Accordingly, just as in Rossi, the lack of specific evidence of the total amount of lost beer sales does not preclude our ultimate conclusion that the customer evidence, especially in conjunction with the expert evidence discussed next, is sufficient to meet the plaintiffs' burden of producing evidence of fact of damage.