Court Opinion

ID: 6103949
Source: CourtListenerOpinion
Date Created: 2022-01-17 08:11:56.167991+00
Date Added: 2024-06-11T08:53:41.743492
License: Public Domain

Supreme Court of Texas
                              ══════════
                               No. 20-0014
                              ══════════

 AMC Entertainment Holdings, Inc., AMC Entertainment, Inc.,
             and American Multi-Cinema, Inc.,
                                Petitioners,

                                     v.

    iPic-Gold Class Entertainment, LLC and iPic Texas, LLC,
                               Respondents

   ═══════════════════════════════════════
              On Petition for Review from the
       Court of Appeals for the First District of Texas
   ═══════════════════════════════════════

                       Argued September 16, 2021

      CHIEF JUSTICE HECHT delivered the opinion of the Court.

      Justice Young did not participate in the decision.

      Respondents allege that petitioners conspired to restrain trade in
the movie-theater market in violation of Section 15.05(a) of the Texas
Free Enterprise and Antitrust Act (“Texas Antitrust Act”). 1 The Act
provides that it “shall be construed in harmony with federal judicial

      1   TEX. BUS. & COM. CODE §§ 15.01-15.22.
interpretations of comparable federal antitrust statutes”. 2 “Section
15.05(a) is comparable to, and indeed taken from, section 1 of the
Sherman Antitrust Act”. 3 The United States Supreme Court has held
that “[t]o survive a motion for summary judgment . . . , a plaintiff seeking
damages for a violation of § 1 must present evidence ‘that tends to
exclude      the    possibility’   that   the   alleged   conspirators   acted
independently.” 4 The parties agree that this requirement governs in
cases brought under the Texas Act; they disagree on its application in
this case. The court of appeals held that respondents satisfied this
requirement and reversed the trial court’s summary judgment for
petitioners. 5 We disagree and thus reverse and render judgment for
petitioners.
                                          I
                                          A
       AMC 6 and its competitor Regal 7 own the two largest movie-

       2   Id. § 15.04.
       3 DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 687 (Tex. 1990); see 15
U.S.C. § 1 (“Every contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce among the several States, or with
foreign nations, is declared to be illegal.”).
       4 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588
(1986) (quoting Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764
(1984)); accord Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554 (2007) (citing
Matsushita).
       5   592 S.W.3d 946, 958 (Tex. App.—Houston [1st Dist.] 2019).
      By “AMC” we refer to petitioners AMC Entertainment Holdings, Inc.,
       6

AMC Entertainment, Inc., and American Multi-Cinema, Inc.
       7   By “Regal” we refer to Regal Entertainment Group.

                                          2
theater chains in North America, with hundreds of theaters each. 8 Both
chains specialize in megaplexes—large theaters with 20 or more screens
and traditional amenities such as popcorn, soft drinks, and candy.
      iPic 9 owns a chain of boutique theaters in the United States. iPic’s
theaters—there were 13 at the time of the trial court proceedings, and
around 15 today—offer an upscale experience with reclining seats
situated in pods, full-service waitstaff, chef-prepared meals, and
specialty cocktails. A “premium plus” ticket at an iPic theater costs more
than twice the typical ticket at an AMC or Regal megaplex.
      iPic alleges that starting in early 2013, AMC and Regal conspired
to eliminate iPic from the markets in Houston and Frisco, just north of
Dallas, by “clearing” a proposed iPic theater near Regal Greenway in
central Houston and another near AMC Stonebriar in Frisco. iPic’s
allegations require an understanding of the film industry.
      AMC, Regal, and iPic are movie exhibitors. Historically,
exhibitors licensed movies from third-party distributors, which acted as
liaisons between exhibitors and the production studios. Today, the six
largest production studios—Walt Disney Studios, Warner Brothers
Entertainment, 20th Century Fox, Paramount Pictures, Sony Pictures,
and Universal Studios—act as their own distributors. But there remain
independent distributors too, such as Lionsgate, Focus, the Weinstein
Company, Bleeker Street, Broad Green, and Open Road Films.

      8  AMC and Regal are two-thirds of the “Big Three” U.S. movie-theater
chains, the third being Cinemark.
      9 By “iPic” we refer to respondents iPic-Gold Class Entertainment, LLC
and iPic Texas, LLC.

                                     3
      Open Road is an independent distributor formed in 2011 as a joint
venture between AMC and Regal. Open Road has since been sold, but at
all times relevant to this lawsuit, it was owned by AMC and Regal, and
executives of both companies sat on its board.
      When theaters in close proximity show the same first-run (new
release) film, they are playing the film day-and-date. To prevent playing
day-and-date with a competitor, a theater can request that a film’s
distributor grant it a clearance—an exclusive license to show the film
for a period of time. Clearance practices are traceable to the earliest days
of the film industry. Because theaters had only a handful of screens,
they could not play every first-run film available. Theaters nearby one
another thus bid against each other to secure the exclusive license to
play a particular film. In exchange for that exclusive license, a theater
would pay the distributor a guaranteed sum and take responsibility for
advertising and promoting the film in the area.
      The parties disagree about what role clearances have played in
the industry in more recent history. At a pretrial hearing in the trial
court, iPic presented witness testimony that clearances began phasing
out in the 1980s when distributors moved to an allocation system. Later,
when megaplexes began sprouting up in the mid-1990s, allocating films
was no longer necessary because a megaplex can play every first-run
movie available.
      Regal is no longer a party to this case, but its historical clearance
practices are central to iPic’s conspiracy allegations against AMC. Regal
CEO Amy Miles testified that when she joined the company in 1999,
Regal already had a general policy of seeking clearances against

                                     4
theaters in proximity to a Regal theater. Miles explained that Regal
recognizes 70 clearance zones across the country in which Regal seeks
clearances against any class of theater within three miles, and
distributors therefore allocate first-run films between Regal and the
theater nearby. In Houston, for example, Regal Greenway sought
clearances against the River Oaks Theatre beginning in 1999 when the
Greenway opened. 10
      In 17 of Regal’s clearance zones, Regal clears a theater owned by
AMC. In 15, one Regal theater clears another Regal theater. One
example is a clearance zone in northern Virginia, where a 20-screen
Regal theater clears one of Regal’s smaller theaters that offers luxury
amenities similar to those offered by iPic. Another example occurs in
northwest Austin, where Regal’s Gateway 16 does not play day-and-date
with its Arbor 8 theater.
      Miles testified that Regal believes clearances are beneficial to the
entire film-industry ecosystem, including theaters and customers,
because clearances ultimately facilitate more films being shown in a
geographic area and for longer. Miles projected that without clearance
zones, theaters would devote most of their screens to blockbusters,
which would play through the theaters faster, resulting in less choice for
consumers and less revenue for distributors and theaters.
      Miles acknowledged, however, that Regal has made some
exceptions to its three-mile policy over the years. Regal usually does not

      10  The historic River Oaks Theatre opened in Houston’s River Oaks
District in 1939 and closed permanently in March 2021. The theater was a
Houston landmark known for playing The Rocky Horror Picture Show on
Saturdays.

                                    5
seek clearances in densely populated areas such as Manhattan, where a
three-driving-miles rule of thumb does not make sense. Regal’s
clearance practices have also varied when it has acquired an existing
theater. “[I]f we acquire a theater that didn’t assert a clearance prior to
the acquisition, we don’t go back and try to change that, post-
acquisition”, Miles explained.
      In 2008, Regal declined to clear a dine-in theater within its
Redmond, Washington clearance zone that later became an iPic. In
2010, Regal declined to clear the iPic Austin, which opened less than
three miles from Regal’s Gateway 16 and Arbor 8 theaters. Miles
testified that these exceptions to Regal’s three-mile policy were tests
conducted at the request of distributors to determine whether luxury
theaters—then a new and innovative concept—would truly compete
with traditional ones. There is conflicting evidence on what the data
from the Redmond and Austin tests show, but Miles testified that once
luxury theaters took off, Regal came around to viewing them as
competitors to Regal’s more traditional theaters.
                                    B
      Before 2012, AMC had never requested clearances against
competing theaters. But that year it adopted its own corporate policy of
requesting clearances against theaters within roughly three miles of an
AMC theater. An internal report prepared by AMC in November 2012
reflects AMC’s determination that asserting clearances could help fend
off “competitive encroachment”.
      In December 2012, AMC made a presentation on the new policy
to various studios and to Open Road personnel. Written materials from

                                    6
that presentation project that without a change in clearance policy, new
competition would negatively affect AMC’s revenue. The materials
reflect that AMC had considered the matter “carefully” and would
“stand behind” the decision to start asserting clearances “for the long-
term health of [its] . . . business”.
       In January 2013, Regal’s president and COO, Greg Dunn, who
also sat on the board of Open Road, directed Regal’s head film buyer,
Ted Cooper, to clear all luxury or dine-in theaters within three miles of
a Regal theater. Around the same time, Regal learned that iPic planned
to build a theater in Houston within three miles of Regal Greenway. In
April 2013, Regal’s Ted Cooper told iPic executive Clark Woods at an
industry conference that Regal planned to clear iPic’s new Houston
theater. A few days later, iPic’s CEO, Hamid Hashemi, emailed a
colleague that “Regal . . . just told us they are clearing us in Houston”,
characterizing Regal’s decision as “[n]o biggie”. Also in April 2013, iPic
opened a new theater in Los Angeles within three miles of an AMC
theater. Despite its new policy, AMC declined to clear iPic Los Angeles,
and the two theaters play day-and-date. It was not until several months
later, around December 2013, that iPic began making plans for a Frisco
theater.
       In April 2014, AMC learned that iPic was in the process of
negotiating a lease for a space in Frisco located within three miles of
AMC Stonebriar. An internal AMC email characterized the forthcoming
iPic as “[a]n obvious clearance situation” and expressed AMC’s intention
to “move quickly” to communicate its clearance request to distributors.
An internal email between AMC personnel dated May 16, 2014,

                                        7
contained this draft clearance request to distributors for the anticipated
iPic Frisco:
       Dear XXXXXXXXX,

       iPic, a movie exhibition company, is planning a new theatre
       at Forum at Wade Park located at the corner of Lebanon
       Rd and Parkwood Blvd in Frisco, TX. This new
       development is 1.75 direct miles and 2.2 driving miles
       north of our AMC Stonebriar theatre, with no geographic
       barriers. This theatre, if it were to play first-run movies,
       would be in substantial competition with AMC Stonebriar
       24. In the last twelve months, AMC Stonebriar 24 has
       grossed $X [amount redacted] and has more than enough
       capacity to fully serve movie-going demand in this zone
       that has a 3-mile population of 82,651 people.

       Accordingly, AMC will not license [Distributor’s] films to
       be played day-and-date with this proposed new theatre, but
       instead requests that each film be licensed pursuant to
       clearances in this particular film licensing zone.
       Clearances in this zone would clearly be deemed
       reasonable under the well-established jurisprudence
       governing the legality of clearances.

       We have enjoyed a productive business relationship with
       [Distributor name] at the Stonebriar 24 since AMC opened
       this location on 8/4/00. We look forward to continuing that
       ongoing relationship in this zone.

       The letters were not sent out immediately. AMC executive Bob
Lenihan testified by deposition that the lack of urgency in sending the
requests—construction on iPic Frisco had not even begun—and AMC’s
being “a big company with a lot of bureaucracy” were the likely reasons
for the delay. Another AMC executive, Nathan Reid, testified by
deposition that AMC’s film department received final approval to send

                                    8
out the requests in late June and that a two-month delay from drafting
to sending a clearance request was “[n]ot at all” unusual.
         On June 20, AMC’s head film buyer, Ryan Wood, forwarded the
draft clearance letter to colleagues with a note that the “[p]lan will be to
send on Tuesday (7/1)”. Still, the letters were not sent out on the 1st.
iPic points to calendar entries in the record indicating that on July 2,
Lenihan had lunch with Open Road personnel and that an AMC
executive had a phone call scheduled with a Regal executive about Open
Road matters. There is no evidence that clearances against iPic were
discussed at the meeting or on the call.
         Ryan Wood testified by deposition that distribution of the letters
was delayed by the holiday weekend. “[P]hone calls needed to be made
to each of the contacts [AMC was] sending [the letters] to”, and it was
too “close to July 4th weekend where [AMC and] a lot of the
[distributors] were [going to be] closed for certain days”. Woods
explained that it was AMC’s practice not to send a clearance letter until
AMC had reached the recipient by telephone first; that with respect to
certain distributors, AMC needed to make calls to multiple people; and
that this process required “a phone conversation”, “not just a voicemail
left”.
         AMC finally started sending out its clearance requests on July 8.
That same day, Regal began calling distributors to communicate that it
wanted to clear iPic Houston. In these phone calls, Regal communicated
to several distributors that it would refuse to play any movie at its
Greenway theater that the distributor also offered to iPic Houston.
AMC’s clearance letters communicated the same message with respect

                                      9
to iPic Frisco.
       No distributor bit on AMC’s requests to clear iPic Frisco. Each
either denied the request outright or refused to address it until iPic
solidified its plans for a Frisco theater. In January 2017, AMC emailed
all the distributors that it had sent clearance requests to for iPic Frisco
and formally withdrew those requests. iPic Frisco was never built for
reasons unrelated to this lawsuit, and iPic has not claimed any damages
related to that proposed theater.
       In response to Regal’s requests, three distributor-studios—Sony,
Universal, and Fox—decided to allocate their films between Regal
Greenway and iPic Houston. The rest denied or ignored Regal’s request.
                                     C
       iPic filed this suit against Regal and AMC in November 2015, just
a few weeks after iPic Houston opened. iPic initially alleged several
antitrust claims under Section 15.05 of the Texas Antitrust Act as well
as a common-law claim for tortious interference with iPic’s business.
       In January 2016, the trial court temporarily enjoined Regal from
making      further   clearance   requests   against   iPic   Houston   or
communicating to distributors that it would not play day-and-date with
iPic Houston. After that order was affirmed on appeal, 11 Regal settled,
leaving AMC as the only defendant. iPic alleges damages in the form of
lost revenue and goodwill during the first few months that iPic Houston
was open, before the trial court’s temporary injunction order.
       AMC filed a traditional and no-evidence motion for summary

       Regal Ent. Grp. v. iPic-Gold Class Ent., LLC, 507 S.W.3d 337 (Tex.
       11

App.—Houston [1st Dist.] 2016, no pet.).

                                    10
judgment on all claims against it. The trial court granted the motion
without stating its reasons and rendered judgment dismissing all iPic’s
claims. iPic appealed the court’s judgment with respect to one claim
alleging a horizontal conspiracy between Regal and AMC to restrain
trade under Section 15.05(a). The court of appeals reversed the
summary judgment and remanded the case for trial. 12 We granted
AMC’s petition for review.
                                      II
      The Texas Antitrust Act’s stated “purpose . . . is to maintain and
promote economic competition in trade and commerce” in the state and
“to provide the benefits of that competition to consumers”. 13 “[T]o the
extent consistent with [that] purpose”, the Act’s provisions should “be
construed in harmony with federal judicial interpretations of
comparable federal antitrust statutes”. 14
      iPic’s sole remaining claim alleges a horizontal conspiracy
between Regal and AMC under Section 15.05(a) of the Act to “crush iPic
with clearances” in order to put iPic out of business in Houston and
Frisco. Even though all iPic’s damages were sustained by iPic Houston,
and AMC only tried to clear the rumored-but-never-built iPic Frisco, iPic
argues that under antitrust law, AMC is liable as Regal’s co-conspirator
for damages to iPic Houston.
      Section 15.05(a) states that “[e]very contract, combination, or

      12   592 S.W.3d 946 (Tex. App.—Houston [1st Dist.] 2019).
      13   TEX. BUS. & COM. CODE § 15.04.
      14   Id.

                                      11
conspiracy in restraint of trade or commerce is unlawful.” 15 Section
15.21 authorizes “[a]ny person . . . whose business or property has been
injured” by a violation of Section 15.05 to sue for damages and injunctive
relief. 16 These provisions are “comparable to, and indeed taken from,”
Sections 1 and 15 of the Sherman Antitrust Act, respectively. 17 Because
“our own caselaw [on the Texas Antitrust Act] is limited,” we must “rely
heavily on the jurisprudence of the federal courts” in Sherman Act cases
to resolve the issues presented here. 18
       Like the language of its federal counterpart, the broad language
of Section 15.05(a) indicates that every conspiracy in restraint of trade
is unlawful. Yet the United States Supreme Court has, since its earliest
decisions, “recognized that [Section 1] was intended to prohibit only
unreasonable restraints of trade.” 19 Some kinds of conspiratorial
agreements—a horizontal agreement to fix prices, for example—are
considered per se illegal. 20 Most, however, are evaluated on a case-by-

       15   Id. § 15.05(a).
       16   Id. § 15.21(a)-(b).
       17DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 687 (Tex. 1990); see 15
U.S.C. §§ 1, 15.
       18In re Mem’l Hermann Hosp. Sys., 464 S.W.3d 686, 708 (Tex. 2015)
(quoting Coca-Cola Co. v. Harmar Bottling Co., 218 S.W.3d 671, 688-689 (Tex.
2006)).
       19 Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 723 (1988)
(citing Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of Univ. of Okla., 468
U.S. 85, 94 (1984)).
       20Id.; see also In re Publ’n Paper Antitrust Litig., 690 F.3d 51, 61 (2d
Cir. 2012) (“An agreement between competitors to fix prices, known as a
horizontal price-fixing agreement, categorically constitutes an unreasonable

                                      12
case basis under the “rule of reason,” which requires the court to
determine whether a restraint is unreasonable by “examining a
defendant’s purpose in implementing the restraint and the restraint’s
effect on competition” as well as all factors relevant to that
examination. 21
       The seminal antitrust case on movie-theater clearances is United
States v. Paramount Pictures. 22 There, the Supreme Court did not reach
the issue of whether clearances are unlawful per se under the Sherman
Act because the Department of Justice had not appealed the district
court’s ruling that they are not. 23 But the Supreme Court noted the
district court’s conclusion that a clearance asserted to protect a theater’s
revenue interest in a film is likely reasonable if the clearance does “not
unduly extend[] as to area or duration”, 24 and the theaters affected are
in “substantial competition” with one another. 25
       AMC and iPic vigorously dispute whether iPic is in substantial
competition with megaplexes like AMC and Regal. But we need not
make that determination because iPic did not raise the issue in its

restraint, and, accordingly, is unlawful per se.” (citing Texaco Inc. v. Dagher,
547 U.S. 1, 5 (2006))).
       21 Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1367 (3d Cir. 1996)
(citing Bd. of Trade of Chi. v. United States, 246 U.S. 231, 238 (1918)).
       22   334 U.S. 131 (1948).
       23   Id. at 145.
       24   Id.
       25   Id. at 146.

                                      13
motion for summary judgment. 26 AMC’s motion instead focused on the
remaining elements of iPic’s claim: (1) whether AMC and Regal made
an agreement to “crush iPic with clearances”; and (2) if they did,

       26  We express no opinion whether the Supreme Court’s statements
about substantial competition in Paramount Pictures survive the Court’s
subsequent decisions clarifying the scope of the Sherman Act and defining the
relevant market for antitrust purposes. Compare Regal Ent. Grp. v. iPic-Gold
Class Ent., LLC, 507 S.W.3d 337, 348 (Tex. App.—Houston [1st Dist.] 2016, no
pet.) (“Whether theaters are in substantial competition turns on whether they
sell a reasonably interchangeable product in the same geographic area.”), with
United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586, 593 (1957)
(“Determination of the relevant market is a necessary predicate to a finding of
a violation of the Clayton Act because the threatened monopoly must be one
which will substantially lessen competition within the area of effective
competition. Substantiality can be determined only in terms of the market
affected.” (footnote and quotation marks omitted)), and Brown Shoe Co. v.
United States, 370 U.S. 294, 325 (1962) (“The boundaries of [a well-defined
submarket within a broader product market] may be determined by examining
such practical indicia as industry or public recognition of the submarket as a
separate economic entity, the product’s peculiar characteristics and uses,
unique production facilities, distinct customers, distinct prices, sensitivity to
price changes, and specialized vendors.”).
        We note, however, that—outside of an inquiry into whether a proposed
merger’s effect “may be substantially to lessen competition” under the Clayton
Act, 15 U.S.C. § 18—the words “substantial competition” have not appeared in
an antitrust decision from the Supreme Court since Theatre Enterprises, Inc.
v. Paramount Film Distributing Corp., 346 U.S. 537 (1954), a decision that also
predates the Court’s seminal opinions in Du Pont and Brown Shoe. Cf. FTC v.
Actavis, Inc., 570 U.S. 136, 159 (2013) (“In California Dental, we held
(unanimously) that abandonment of the ‘rule of reason’ in favor of presumptive
rules (or a ‘quick-look’ approach) is appropriate only where ‘an observer with
even a rudimentary understanding of economics could conclude that the
arrangements in question would have an anticompetitive effect on customers
and markets.’” (quoting Cal. Dental Ass’n v. FTC, 526 U.S. 756, 770 (1999)));
FTC v. Ind. Fed’n of Dentists, 476 U.S. 447, 458 (1986) (“[W]e decline to resolve
this case by forcing the Federation’s policy into the ‘boycott’ pigeonhole and
invoking the per se rule.”).

                                       14
whether that agreement caused injury to iPic Houston. 27 We need only
address the first issue.
                                        III
       iPic alleges a conspiratorial agreement between AMC and Regal
to “crush iPic with clearances”—i.e., to put iPic out of business in
Houston and Frisco by preventing it from obtaining first-run films in
those markets. Because this appeal arises from a summary judgment for
AMC, we review the lower courts’ judgments de novo, taking as true all
evidence favorable to iPic and indulging every permissible inference in
its favor. 28 But because federal antitrust law guides our construction of
the Texas Antitrust Act, our examination of the evidence must also take
into account federal caselaw limiting what inferences are reasonable
when the plaintiff’s evidence is ambiguous and the alleged conspiracy is
not plausible. 29 We begin with an overview of the different types of
antitrust claims available under Texas and federal law and the elements

       27 See TEX. BUS. & COM. CODE § 15.21 (authorizing any person “whose
business or property has been injured by reason of any conduct declared
unlawful” under Section 15.05 to sue for damages or injunctive relief);
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-586 (1986)
(“To survive petitioners’ motion for summary judgment, respondents must
establish that there is a genuine issue of material fact as to whether petitioners
entered into an illegal conspiracy that caused respondents to suffer a
cognizable injury.” (footnote and citation omitted) (citing FED. R. CIV. P. 56(e))).
       28See BPX Operating Co. v. Strickhausen, 629 S.W.3d 189, 195-196
(Tex. 2021).
       29See Matsushita, 475 U.S. at 588 (“[A]ntitrust law limits the range of
permissible inferences from ambiguous evidence in a § 1 case.”); see also In re
Publ’n Paper Antitrust Litig., 690 F.3d 51, 63 (2d Cir. 2012) (“Matsushita, then,
stands for the proposition that substantive ‘antitrust law limits the range of
permissible inferences’ that may be drawn from ambiguous evidence.” (quoting
Matsushita, 475 U.S. at 588)).

                                        15
required to establish the claim alleged here.
                                        A
       For anticompetitive conduct to give rise to liability under
Section 1 of the Sherman Act or Section 15.05(a) of the Texas Antitrust
Act, the conduct must “stem[] . . . from an agreement, tacit or express”,
rather than from independent action. 30 Because antitrust law “does not
prohibit unreasonable restraints of trade as such—but only restraints
effected by a contract, combination, or conspiracy—it leaves untouched
a   single     firm’s   anticompetitive      conduct   (short   of   threatened
monopolization) that may be indistinguishable in economic effect from
the conduct of two firms”. 31 Thus, antitrust law generally distinguishes
between unilateral and multilateral conduct, treating multilateral
conduct as the more dangerous and more likely to warrant judicial
intervention. 32 In the federal context, challenges to multilateral conduct

       30 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 553 (2007) (quoting Theatre
Enters., 346 U.S. at 540); see also Monsanto Co. v. Spray-Rite Serv. Corp., 465
U.S. 752, 761 (1984) (“Independent action is not proscribed [under the
Sherman Act]. A manufacturer of course generally has a right to deal, or refuse
to deal, with whomever it likes, as long as it does so independently.”).
       31   Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 775 (1984).
       32See Am. Needle, Inc. v. Nat’l Football League, 560 U.S. 183, 190 (2010)
(“The meaning of the term ‘contract, combination . . . , or conspiracy’ is
informed by the ‘basic distinction’ in the Sherman Act ‘between concerted and
independent action’ that distinguishes § 1 of the Sherman Act from § 2.”
(quoting Copperweld Corp., 467 U.S. at 767)); cf. Copperweld Corp., 467 U.S.
at 767-768 (“In part because it is sometimes difficult to distinguish robust
competition from conduct with long-run anti-competitive effects, Congress
authorized Sherman Act scrutiny of single firms only when they pose a danger
of monopolization. Judging unilateral conduct in this manner reduces the risk
that the antitrust laws will dampen the competitive zeal of a single aggressive
entrepreneur.”).

                                        16
are brought under Section 1 of the Sherman Act (the federal analogue
to Section 15.05(a) of the Texas Antitrust Act), and challenges to
unilateral conduct are brought under Section 2 of the Sherman Act (the
federal analogue to Section 15.05(b)). 33
       Because a Section 1 claim challenges multilateral conduct, its
“very essence . . . is the existence of an agreement.” 34 Indeed, the
relevant danger or “activity that warrants § 1 scrutiny” is the “sudden
joining of two independent sources of economic power previously
pursuing separate interests”. 35
       After a plaintiff “establishes the existence of an illegal contract or
combination, it must then proceed to demonstrate that the agreement
constituted an unreasonable restraint of trade either per se or under the

       33Cf. Am. Needle, 560 U.S. at 190 (“Section 1 applies only to concerted
action that restrains trade. Section 2, by contrast, covers both concerted and
independent action, but only if that action ‘monopolize[s][]’ or ‘threatens actual
monopolization,’ a category that is narrower than restraint of trade.” (citations
omitted)).
       34  Alvord-Polk, Inc. v. F. Schumacher & Co., 37 F.3d 996, 999 (3d Cir.
1994); see also Monsanto, 465 U.S. at 761 (“Independent action is not
proscribed. A manufacturer of course generally has a right to deal, or refuse to
deal, with whomever it likes, as long as it does so independently.”); Theatre
Enters., 346 U.S. at 540 (“The crucial question is whether respondents’ conduct
toward petitioner stemmed from independent decision or from an agreement,
tacit or express.”); In re Chocolate Confectionary Antitrust Litig., 801 F.3d 383,
396 (3d Cir. 2015) (“An important corollary to the agreement requirement is
that § 1 liability cannot be predicated on a defendant’s unilateral actions, no
matter its anticompetitive motivations.”); Cap. Imaging Assocs., P.C. v.
Mohawk Valley Med. Assocs., Inc., 996 F.2d 537, 542 (2d Cir. 1993) (“[A]
plaintiff claiming a § 1 violation must first establish a combination or some
form of concerted action between at least two legally distinct economic
entities.”).
       35   Copperweld Corp., 467 U.S. at 771.

                                       17
rule of reason.” 36 However, “[t]he question whether an arrangement is a
contract, combination, or conspiracy is different from and antecedent to
the question whether it unreasonably restrains trade.” 37
       “A § 1 agreement may be found when ‘the conspirators had a unity
of purpose or a common design and understanding, or a meeting of
minds in an unlawful arrangement.’” 38 “Such proof may come in the
form of direct evidence, e.g., an explicit admission from a participant
that an antitrust conspiracy existed, or circumstantial evidence.” 39
Whether a factfinder can properly infer the existence of an agreement
or conspiracy from ambiguous or circumstantial evidence will “vary with
the plausibility of the plaintiffs’ theory and the dangers associated with

       36 Cap. Imaging Assocs., 996 F.2d at 542. With rare exceptions, courts
use a three-step, burden-shifting framework to evaluate Section 1 claims under
the rule of reason. See, e.g., K.M.B. Warehouse Distribs., Inc. v. Walker Mfg.
Co., 61 F.3d 123, 127 (2d Cir. 1995) (“Establishing a violation of the rule of
reason involves three steps.”).
       First, the plaintiff “bears the initial burden of showing that the
challenged action has had an actual adverse effect on competition as a whole
in the relevant market.” Id. (quoting Cap. Imaging Assocs., 996 F.2d at 543).
Second, “[i]f the plaintiff succeeds, the burden shifts to the defendant to
establish the pro-competitive redeeming virtues of the action.” Id. (internal
quotation marks omitted) (quoting Cap. Imaging Assocs., 996 F.2d at 543).
Third, “[s]hould the defendant carry this burden, the plaintiff must then show
that the same pro-competitive effect could be achieved through an alternative
means that is less restrictive of competition.” Id. (citing Cap. Imaging Assocs.,
996 F.2d at 543).
       37   Am. Needle, 560 U.S. at 186.
       38Copperweld Corp., 467 U.S. at 771 (quoting Am. Tobacco Co. v. United
States, 328 U.S. 781, 810 (1946)).
       39 Chocolate Confectionary Antitrust Litig., 801 F.3d at 396 (citing
InterVest, Inc. v. Bloomberg, L.P., 340 F.3d 144, 159 (3d Cir. 2003)).

                                       18
such inferences.” 40
                                          B
       In Matsushita Electric Industrial Co. v. Zenith Radio Corp., the
Supreme Court warned that “courts should not permit factfinders to
infer conspiracies when such inferences are implausible[] because the
effect of such practices is often to deter procompetitive conduct.” 41 The
Court explained that “if the factual context [of the alleged conspiracy]
renders [the plaintiff’s] claim implausible—if the claim is one that
simply makes no economic sense—[the plaintiff] must come forward
with more persuasive evidence to [survive a motion for summary
judgment] than would otherwise be necessary.” 42 A corollary to this rule
is that “conduct [that is just] as consistent with permissible competition
as with illegal conspiracy does not, standing alone, support an inference
of antitrust conspiracy.” 43
       Matsushita        involved    an       allegation   by   American      TV
manufacturers that a group of Japanese manufacturers had conspired
over a 20-year period to drive the American firms from the market by
fixing artificially high prices in Japan and artificially low prices in the
U.S. The American firms’ theory was that once their businesses

       40In re Flat Glass Antitrust Litig., 385 F.3d 350, 357 (3d Cir. 2004)
(quoting Petruzzi’s IGA Supermkts., Inc. v. Darling-Del. Co., 998 F.2d 1224,
1232 (3d Cir. 1993)).
       41475 U.S. 574, 593 (1986) (citing Monsanto Co. v. Spray-Rite Serv.
Corp., 465 U.S. 752, 762-764 (1984)).
       42Id. at 587; see also In re High Fructose Corn Syrup Antitrust Litig.,
295 F.3d 651, 661 (7th Cir. 2002) (“More evidence is required the less plausible
the charge of collusive conduct.”).
       43   Matsushita, 475 U.S. at 588 (citing Monsanto, 465 U.S. at 764).

                                        19
collapsed, the Japanese firms would raise prices in the U.S. to recoup
their losses from the artificially low prices they had imposed previously.
The plaintiffs’ evidence consisted largely of the prices themselves. The
district court concluded that evidence did not raise a fact issue on the
existence of a conspiracy and granted summary judgment for the
defendants. The court of appeals reversed.
      The Supreme Court pointed to several reasons why the plaintiffs’
conspiracy theory was implausible. One was that if the conspiracy did
exist, it was a failure. Twenty years after the conspiracy was alleged to
have commenced, two American firms, including lead plaintiff Zenith,
retained the largest shares of the American market. The Court noted
that “[t]he alleged conspiracy’s failure to achieve its ends in the two
decades of its asserted operation is strong evidence that the conspiracy
[did] not in fact exist.” 44 A conspiracy among the defendant firms would
also be “incalculably more difficult to execute than an analogous plan
undertaken by a single predator.” 45 “[S]uccess [would be] speculative
and depend[] on a willingness to endure losses for an indefinite
period”. 46 Moreover, “each conspirator [would have] a strong incentive
to cheat, letting its partners suffer the losses necessary to destroy the
competition while sharing in any gains if the conspiracy succeed[ed].” 47
Thus, the Court explained, the defendants “had no motive to enter into

      44   Id. at 592.
      45   Id. at 590.
      46   Id.
      47   Id.

                                   20
the alleged conspiracy.” 48 “[T]he absence of any plausible motive to
engage in the conduct charged is highly relevant to whether a ‘genuine
issue for trial’ exists”, the Court said. 49
       The Court reversed the court of appeals’ judgment and remanded
for that court to reconsider the evidence in light of the standards
announced. 50 The Court directed the court of appeals to determine
whether there was any evidence that was “sufficiently unambiguous to
permit a trier of fact to find that petitioners conspired to price
predatorily for two decades despite the absence of any apparent motive
to do so.” 51 Evidence offered to defeat summary judgment “must ‘ten[d]
to exclude the possibility’ that [the defendants] underpriced [the
plaintiffs] to compete for business rather than to implement an
economically senseless conspiracy”, the Court said. 52 Absent evidence
meeting that strict standard, the Court explained, “there [was] no
‘genuine issue for trial’” under Federal Rule of Civil Procedure 56(e), and
the Japanese firms were entitled to summary judgment. 53
       The Supreme Court extended the plausibility requirement to the
pleading stage in Bell Atlantic Corp. v. Twombly, where it held that in
order to survive a motion to dismiss under Federal Rule of Civil

       48   Id. at 595.
       49   Id. at 596 (quoting FED. R. CIV. P. 56(e)).
       50   Id. at 597-598.
       51   Id. at 597.
        Id. at 597-598 (first alteration in original) (quoting Monsanto Co. v.
       52

Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984)).
       53   Id. at 598.

                                          21
Procedure 12(b)(6), a plaintiff’s conspiracy allegations must be
“plausible on [their] face.” 54 In that case, the Court held that the
plaintiffs’ factual allegations “[came] up short” 55 and failed to “nudge[]
their claims across the line from conceivable to plausible” 56 because the
allegations rested “on descriptions of parallel conduct and not on any
independent allegation of actual agreement among the [defendants].” 57
The Court reiterated that parallel business conduct, even if consciously
undertaken, is ambiguous: it is just as consistent with conspiracy as
with competitive actions “unilaterally prompted by common perceptions
of the market.” 58 “[A]t the summary judgment stage”, the Court
reminded, evidence of ambiguous conduct is not enough; rather, “a § 1
plaintiff’s offer of conspiracy evidence must tend to rule out the
possibility that the defendants were acting independently”. 59
                                        C
       Matsushita and Twombly teach that (1) parallel business conduct,
alone, is insufficient to raise a fact issue on the existence of a
conspiracy; 60 (2) when the conspiracy alleged is implausible, more

       54   550 U.S. 544, 570 (2007).
       55   Id. at 564.
       56   Id. at 570.
       57   Id. at 564.
       58   Id. at 554.
       59Id. (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 588 (1986)).
       60Id. at 556-557 (“Without more, parallel conduct does not suggest
conspiracy . . . .”).

                                        22
persuasive evidence will be required to survive summary judgment; 61
and (3) the plaintiff’s evidence must tend to exclude the possibility that
the defendants acted independently. 62
         Lower federal courts have fleshed out these principles by
requiring plaintiffs who base their claim on consciously parallel
business behavior to demonstrate the existence of “plus factors”. 63 These
“factors serve as proxies for direct evidence of an agreement” by
“ensur[ing]        that    courts    punish     ‘concerted     action’—an     actual
agreement—instead            of   the   ‘unilateral,   independent      conduct    of
competitors.’” 64 There is no definitive list of plus factors, 65 but one
district court has listed these eight:
         (1) actions that would be against the defendants’ self-
         interest if the defendants were acting independently, but

          Matsushita, 475 U.S. at 587 (“[I]f the factual context renders
         61

respondents’ claim implausible—if the claim is one that simply makes no
economic sense—respondents must come forward with more persuasive
evidence to support their claim than would otherwise be necessary.”).
         62Twombly, 550 U.S. at 554 (“[A]t the summary judgment stage a § 1
plaintiff’s offer of conspiracy evidence must tend to rule out the possibility that
the defendants were acting independently . . . .”); Matsushita, 475 U.S. at 588
(“To survive a motion for summary judgment or for a directed verdict, a
plaintiff seeking damages for a violation of § 1 must present evidence ‘that
tends to exclude the possibility’ that the alleged conspirators acted
independently.” (quoting Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752,
764 (1984))).
         63   See, e.g., In re Flat Glass Antitrust Litig., 385 F.3d 350, 360 (3d Cir.
2004).
         Id. (quoting In re Baby Food Antitrust Litig., 166 F.3d 112, 122 (3d
         64

Cir. 1999)).
         65See id. (“The question then becomes, what are ‘plus factors’ that
suffice to defeat summary judgment? There is no finite set of such criteria; no
exhaustive list exists.”).

                                           23
       consistent with their self-interest if they were acting in
       concert; (2) a motive to conspire; (3) an opportunity to
       conspire; (4) market concentration and structure conducive
       to collusion; (5) pretextual explanations for anticompetitive
       conduct; (6) sharing of price information; (7) signaling; and
       (8) involvement in other conspiracies. 66

       “A plausible allegation that the parallel conduct was not in the
alleged conspirators’ independent self-interest absent an agreement is
generally considered the most important ‘plus factor.’” 67
       A court’s task in evaluating the propriety of summary judgment
is to “[v]iew[] all the evidence and tak[e] the plus factors into
consideration” and determine if the evidence tips the scales in favor of a
conspiracy by “tend[ing] to exclude the possibility that the alleged
coconspirators acted independently or based upon legitimate business
purposes.” 68 “[T]he quantum of evidence required to exclude the
possibility of independent action or legitimate business purposes is

       66In re Pool Prods. Distrib. Mkt. Antitrust Litig., 988 F. Supp. 2d 696,
711 (E.D. La. 2013) (citing ABA Section of Antitrust Law, Proof of Conspiracy
Under Federal Antitrust Laws 69-91 (1st ed. 2010) [hereinafter Proof of
Conspiracy] (collecting cases)).
       67 Id. (citing Proof of Conspiracy, supra note 66, at 70); see also In re
Travel Agent Comm’n Antitrust Litig., 583 F.3d 896, 907-908 (6th Cir. 2009)
(explaining that the “[k]ey to” one of the court’s prior decisions reversing a
grant of summary judgment for the defendants in a Section 1 case was that the
anticompetitive policy at issue “would not be in either defendant’s independent
economic interest” and that each defendant would have “a natural inclination
not” to adopt the policy on its own); Merck-Medco Managed Care, LLC v. Rite
Aid Corp., 201 F.3d 436, 1999 WL 691840, at *10 (4th Cir. 1999) (unpublished)
(“Evidence of acts contrary to an alleged conspirator’s economic interest is
perhaps the strongest plus factor indicative of a conspiracy.”).
       68   Merck-Medco Managed Care, 1999 WL 691840, at *9.

                                      24
directly related to the plausibility of the plaintiff’s theory.” 69 “If the
plaintiff advances a strong, plausible theory then the quantum of
evidence tending to exclude independent action is not as great as if the
plaintiff advances a weak or implausible theory. Likewise, when there
is a risk that the threat of antitrust liability will chill legitimate,
procompetitive conduct by market participants, the quantum of
evidence is also high.” 70
                                      IV
       We turn to the allegations and evidence in this case.
                                      A
       iPic alleges that AMC and Regal conspired to “crush iPic with
clearances” in order to “eliminate” it “from the markets of Houston and
Frisco.” iPic alleges that the conspiracy was formed in January 2013
when, after hearing AMC’s presentation to Open Road, Regal president
Greg Dunn directed Regal’s film department to clear any luxury or dine-
in theater concept within three miles of a Regal theater. iPic further
alleges that the conspiracy culminated with AMC and Regal’s near
simultaneous clearance requests on July 8, 2014. iPic claims no damages

       69 Id. at *8; see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986) (“[I]f the factual context renders respondents’ claim
implausible—if the claim is one that simply makes no economic sense—
respondents must come forward with more persuasive evidence to support
their claim that would otherwise be necessary.”).
       70Merck-Medco Managed Care, 1999 WL 691840, at *8; see also In re
Coordinated Pretrial Procs. in Petroleum Prods. Antitrust Litig., 906 F.2d 432,
439 (9th Cir. 1990) (“Matsushita establishes that a trial judge should not
permit an inference of antitrust conspiracy from circumstantial evidence
where to do so would have the effect of deterring significant procompetitive
conduct.”).

                                      25
with respect to iPic Frisco—the theater was never built due to failed
lease negotiations, and AMC eventually withdrew its clearance requests
with respect to that theater. Rather, iPic alleges that Regal’s requests
to clear iPic Houston resulted in lost revenue and goodwill to that
theater and that AMC is vicariously liable for those losses as Regal’s co-
conspirator.
       In our view, the “factual context” of this case “renders [iPic’s]
claim implausible”. 71 The first problem is that the timeline of events
makes the existence of an AMC–Regal agreement to target iPic seem
farfetched. Regal first told iPic that its Greenway theater would seek
clearances against iPic Houston in April 2013, eight months before iPic
even began discussing the possibility of a Frisco theater, and a year
before AMC learned about iPic’s plans for a Frisco theater.
       It is also hard to see why AMC and Regal would have any motive
to conspire to seek the specific clearances they sought together as a unit
rather than independently. 72 There is no nonspeculative basis in the
record for concluding that both exhibitors’ participation was essential
for either to “recover[], in the form of later monopoly profits, more than
the losses suffered.” 73 To the contrary, Regal did not need AMC’s help to

       71   Matsushita, 475 U.S. at 587.
       72 Cf. Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust
Litig., 906 F.2d at 444 (noting that “even in highly concentrated markets, a
unilateral price hike might be too risky to make without advance agreement if
the increase could not be readily reversed without a significant loss of
goodwill”).
       73Matsushita, 475 U.S. at 589; accord Weyerhaeuser Co. v. Ross-
Simmons Hardwood Lumber Co., 549 U.S. 312, 319 (2007) (“Without . . . a
reasonable expectation [of recouping its investment in the long run], a rational

                                       26
clear iPic in Houston. And when AMC requested clearances against iPic
Frisco in July 2014, it was implementing a policy that AMC had
unilaterally adopted more than a year-and-a-half earlier, before the
conspiracy is alleged to have begun.
       iPic argues that by teaming up and making their formal requests
on the same day, Regal and AMC would have a greater chance of success
with distributors. But it is hard to see why Regal’s requests for
clearances in Houston would have any impact on a distributor’s decision
how to allocate films 270 miles away in Frisco, or vice versa.
       iPic also contends that Regal and AMC’s teaming up sends a
stronger message to iPic than either exhibitor’s requesting clearances
alone would have. But the clearance requests target only two iPics, one
of which was never built. Except for iPic Houston, all iPic’s theaters have
had access to all first-run films since the day they opened their doors.
One of these, iPic Los Angeles, opened within a three-mile radius of an
AMC theater in April 2013—after the conspiracy allegedly began—and
AMC declined to clear it. If AMC and Regal did conspire in January 2013
to “crush iPic with clearances”, the conspiracy was a failure. 74
                                       B
       iPic nonetheless contends that it has presented evidence of

firm would not willingly suffer definite, short-run losses.”); Interstate Cir. v.
United States, 306 U.S. 208, 226 (1939) (“Each distributor was advised that the
others were asked to participate; each knew that cooperation was essential to
successful operation of the plan.”).
       74 See Matsushita, 475 U.S. at 592 (“The alleged conspiracy’s failure to
achieve its ends in the two decades of its asserted operation is strong evidence
that the conspiracy does not in fact exist.”).

                                       27
several plus factors that collectively tip the scales in favor of a
conspiracy. We start with the “most important” one: whether the
clearance requests “would be against [AMC’s] self-interest if [it] were
acting independently, but consistent with [AMC’s] self-interest if [it]
were acting in concert” with Regal. 75 iPic relies primarily on three
categories of evidence to establish this plus factor:
   (1)        internal analyses by AMC projecting that a clearance zone in
              which films are allocated between an AMC theater and a
              nearby iPic may result in substantially more revenue loss to
              AMC than its theater’s playing day-and-date with a nearby
              iPic would;

   (2)        deposition testimony of Regal executive Ted Cooper that the
              results of Regal’s “test” decision not to clear iPic Redmond in
              2008 indicated that having an iPic-type luxury theater’s
              playing day-and-date with a nearby Regal theater would
              actually increase attendance at the Regal theater; and

   (3)        data indicating that Regal Greenway lost substantial revenue
              in November 2015 when it refused to play a new Star Wars
              movie that the studio offered to both iPic and Greenway in
              defiance of Regal’s clearance request. 76

         75 In re Pool Prods. Distrib. Mkt. Antitrust Litig., 988 F. Supp. 2d 696,
711 (E.D. La. 2013); see also Nat’l Hockey League Players Ass’n v. Plymouth
Whalers Hockey Club, 419 F.3d 462, 475 (6th Cir. 2005) (phrasing this plus
factor as “whether the defendants’ actions, if taken independently, would be
contrary to their economic self-interest”); City of Tuscaloosa v. Harcros Chems.,
Inc., 158 F.3d 548, 570 n.33 (11th Cir. 1998) (“[W]e read this reference to a
defendant’s ‘economic self-interest’ as a reference to what that defendant’s
legitimate economic self-interest would be under the assumption that it acted
alone . . . .”).
          iPic also argues that “[t]he studios . . . acted against their own
         76

interests in allocating films between iPic and Regal” because their stated
preference would have been to license films to both Greenway and iPic Houston
simultaneously. But iPic has not named any studio as a co-conspirator, and

                                       28
       This evidence supports iPic’s assertion that it is against an
exhibitor’s economic interest—in the short term, at least—to refuse to
play day-and-date with a competitor. The court of appeals recognized as
much but then leapt to the conclusion that the first and “most
important” plus factor had been established. 77 iPic mostly parrots this
analysis, and it is incorrect.
       There is nothing illegal about a company’s pursuing action that
trades short-term financial loss for long-term gain. Commentators have
warned that “[o]ne must not characterize a firm’s sacrifice of short-run
interest in favor of long-run interest as contrary to self-interest. Such a
sacrifice by itself tells us nothing about possible conspiracy[] because a
firm often makes this choice . . . .” 78 Rather, the inquiry the first plus
factor invites is whether the conduct at issue would be against the
defendant’s self-interest if it were acting independently, but consistent
with the defendant’s self-interest if it were acting in concert with
another.

one could just as easily argue that keeping Regal happy would be in a studio’s
long-term interest.
       77 See 592 S.W.3d 946, 957 (Tex. App.—Houston [1st Dist.] 2019)
(“Summary-judgment evidence showed that clearances were not necessarily
profitable in the short run but could help exhibitors avoid overall losses in the
long run. Thus, AMC was acting against its short-term economic interest by
seeking a clearance of the proposed iPic Frisco . . . .”).
       78 6 PHILIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW: AN
ANALYSIS OF ANTITRUST PRINCIPLES AND THEIR APPLICATION 110 (3d ed.
2010); see also Williamson Oil Co. v. Philip Morris USA, 346 F.3d 1287, 1310
(11th Cir. 2003) (“[W]e must exercise prudence in labeling a given action as
being contrary to the actor’s economic interests, lest we be too quick to second-
guess well-intentioned business judgments of all kinds.”).

                                       29
       iPic argues that “a reasonable jury could find that AMC and Regal
would only expose themselves to such an economic hit, in tandem with
one another, if they expected to jointly drive their new premium
boutique competitor out of business in Frisco, Houston, and around the
country.” But that is simply not a rational inference in the factual
context of this case, where it is undisputed that both Regal and AMC
have sought other clearances independently. iPic claims that a
conspiracy between Regal and AMC to harm iPic’s business in Houston
and Frisco “would radically expand the area in which iPic [would be]
precluded from competing”, but the record does not support that
assertion. Regal may have been trying to harm iPic’s Houston theater,
and AMC was undoubtedly trying to preclude an iPic Frisco from even
being built. But nothing about the economics of the July 2014 clearance
requests suggests that they were made pursuant to an otherwise
“economically senseless” agreement. 79 Thus, iPic’s “concept of ‘action
against      self-interest’ . . . merely    constitute[s]   a   restatement   of
interdependence.” 80
       iPic argues that it has also presented evidence of several plus
factors found by the court of appeals: motive and opportunity to
conspire, communications between the parties, a pretextual explanation

       79   Matsushita, 475 U.S. at 596-597.
       80 In re Baby Food Antitrust Litig., 166 F.3d 112, 122 (3d Cir. 1999); see
also Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 227
(1993) (“Tacit collusion, sometimes called oligopolistic price coordination or
conscious parallelism, describes the process, not in itself unlawful, by which
firms in a concentrated market might in effect share monopoly power . . . by
recognizing their shared economic interests and their interdependence with
respect to price and output decisions.”).

                                           30
for anticompetitive conduct, and facts consistent with a traditional
conspiracy. 81 The evidence iPic points to in support of these factors fits
roughly into three buckets.
      The first bucket consists of evidence of communications between
AMC and Regal between 2012 and 2014, sometimes through their joint
venture, Open Road. In May 2012, Rich Boynton at AMC emailed his
contacts at Open Road and asked them to find out whether Regal would
be clearing a dine-in theater called Studio Movie Grill that was rumored
to be opening near Regal Greenway. Open Road’s Elliot Slutzky
responded that Regal had informed him that it would not be clearing
that theater. iPic alleges that this exchange violated Open Road’s
information-sharing guidelines, which forbade AMC and Regal from
sharing “competitively sensitive information” about their film-
exhibition businesses in order to avoid antitrust allegations. 82
      The record also contains an internal AMC report dated November
2012 that lists theaters planned by competitors along with a
recommendation whether to seek a clearance against each theater. One
page of the report analyzes a new Regal theater being built in the
Atlanta area and expected to open in 2014. The clearance-
recommendation section states: “Further conversation needed with
Regal”. An email circulated internally at AMC in June 2014 reflects that
AMC had decided not to clear that Atlanta Regal and states: “[W]e are

      81   592 S.W.3d at 958.
      82 AMC disputes that clearance decisions are “competitively sensitive
information” and contends that it could have obtained the same information
from distributors, Studio Movie Grill, or industry reports.

                                    31
going to tell Regal since we decided not to clear you here you should un-
clear us at Shirlington.”
      The second bucket holds the timeline of AMC’s and Regal’s
decisions to start clearing dine-in theaters and their communications
with studios about clearing iPic. Included are the facts that AMC and
Regal sent their requests to clear iPic on the same day and that each
exhibitor’s request stated that its theater would refuse to play first-run
films offered to iPic—statements that iPic characterizes as “threats”.
      The third bucket holds a shred of evidence involving Regal’s post-
clearance-request conduct. In a November 2015 email, Alan Davy, the
Regal executive who made the July 2014 clearance requests, reported to
the general manager of Regal’s MarqE megaplex that iPic “tanked” on
The Peanuts Movie and then said: “The problem was Studio 30 didn’t get
the benefit.” Studio 30 was an AMC megaplex (now closed) that was
located about five miles from both Regal Greenway and iPic Houston.
      Taking iPic’s evidence together and in the light most favorable to
iPic, we conclude that it does not raise a genuine issue of material fact
that the conspiracy iPic alleges ever existed. The national clearance
strategy that AMC adopted in late 2012 became public knowledge when
it was presented directly to distributors around the same time that it
was presented to Open Road. It may be that AMC and Regal were
monitoring each other’s clearance strategies, but there is no evidence
that Regal and AMC ever communicated with one another about
clearing iPic.
      Allegations of general contacts or even specific contacts that are
abstract or vague in nature are not enough to support a reasonable

                                   32
inference of conspiracy under federal law. 83 That is all iPic has here. The
Open Road email chain shows only that AMC obtained information
(perhaps wrongfully) about Regal’s intentions with respect to another
dine-in theater in Houston. This exchange occurred a year before iPic
even started making plans for a Frisco theater. Other evidence shows
that AMC and Regal may have engaged in some horse trading with
respect to clearances between their own theaters. That may be normal
industry behavior or it may be improper. Regardless, it is not evidence
of a conspiracy directed towards iPic. Alan Davy’s November 2015 email
comment that AMC’s Studio 30 “didn’t get the benefit” of iPic’s poor

       83 See Kreuzer v. Am. Acad. of Periodontology, 735 F.2d 1479, 1488 (D.C.
Cir. 1984) (“The mere showing of frequent relations between alleged co-
conspirators, however, is insufficient to infer an illegal agreement.”); id. at
1489 (“These specific contacts between [the defendants] are of too abstract a
nature for this court to infer a conspiracy to violate the Sherman Act.”); see also
Kleen Prods. LLC v. Georgia-Pac. LLC, 910 F.3d 927, 936 (7th Cir. 2018)
(concluding that plaintiffs’ “‘proof’ of prior knowledge amount[ed] to nothing
more than speculation” where the “supposed smoking gun” consisted of a single
memo that “could be nothing more than a somewhat accurate industry
prediction”); In re Chocolate Confectionary Antitrust Litig., 801 F.3d 383, 409
(3d Cir. 2015) (concluding that three “sporadic communications” between
competitors’ employees were “insufficient to create a reasonable inference of a
conspiracy”); Blomkest Fertilizer, Inc. v. Potash Corp. of Sask., 203 F.3d 1028,
1034-1035 (8th Cir. 2000) (en banc) (“The price verifications relied upon were
sporadic and testimony suggests that price verifications were not always given.
The fact that there were several dozen communications is not so significant
considering the communications occurred over at least a seven-year period in
which there would have been tens of thousands of transactions.”); In re Citric
Acid Litig., 191 F.3d 1090, 1105 (9th Cir. 1999) (concluding that evidence of
“sporadic price discussions” between individuals at competing companies was
insufficient to survive summary judgment); Krehl v. Baskin-Robbins Ice Cream
Co., 664 F.2d 1348, 1357-1358 (9th Cir. 1982) (noting the trial court’s finding
“that franchisees had established only sporadic exchanges of price information”
and concluding that the exchanges “failed to prove any unlawful conspiracy”).

                                        33
performance on The Peanuts Movie is certainly odd, but there is no link
in the evidence between this email and AMC’s request to clear iPic
Frisco.
                     *       *       *       *      *
      The conspiracy that iPic has alleged is implausible, and its case
rests on parallel conduct and suspicion. That is not enough to survive
summary judgment under federal antitrust law because it does not tend
to exclude the possibility that AMC acted independently. 84 Because we
construe the Texas Antitrust Act in harmony with federal law, iPic’s
evidence is not enough to survive summary judgment under the Texas
Act either. 85 We reverse the court of appeals’ judgment and render
judgment for AMC.

                                         Nathan L. Hecht
                                         Chief Justice

OPINION DELIVERED: January 14, 2022

      84 See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-557 (2007);
Matsushita, 475 U.S. at 593-598.
      85See TEX. BUS. & COM. CODE § 15.04 (“The provisions of this Act shall
be construed . . . in harmony with federal judicial interpretations of
comparable federal antitrust statutes . . . .”).

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