Court Opinion

ID: 4301306
Source: CourtListenerOpinion
Date Created: 2018-08-06 17:00:37.742859+00
Date Added: 2024-06-11T14:28:25.006176
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

 ARANDELL CORP.; BRIGGS AND                     No. 16-17099
 STRATTON CORPORATION;
 CARTHAGE COLLEGE; LADISH CO.,                    D.C. No.
 INC.; MERRICK’S INC.; SARGENTO                2:03-cv-01431-
 FOODS, INC.,                                     RCJ-PAL
               Plaintiffs-Appellants,

                    v.                            OPINION

 CENTERPOINT ENERGY SERVICES,
 INC.,
              Defendant-Appellee.

       Appeal from the United States District Court
                 for the District of Nevada
    Robert Clive Jones, Senior District Judge, Presiding

          Argued and Submitted February 16, 2018
                 San Francisco, California

                     Filed August 6, 2018

Before: Carlos T. Bea and N. Randy Smith, Circuit Judges,
          and Robert S. Lasnik, * District Judge.

                    Opinion by Judge Bea

   *
     The Honorable Robert S. Lasnik, Senior District Judge for the
Western District of Washington, sitting by designation.
2        ARANDELL V. CENTERPOINT ENERGY SERVS.

                          SUMMARY **

                          Antitrust Law

    The panel reversed the district court’s summary
judgment in favor of CenterPoint Energy Services, Inc.
(“CES”), a natural gas company, in a class action alleging
that ten large natural gas companies colluded to fix retail
natural gas prices in Wisconsin.

    CES was a wholly owned subsidiary of Reliant Energy,
Inc. The plaintiff class alleged that certain Reliant entities –
including CES – conspired with other natural gas
conglomerates to fix retail natural gas prices.

    The panel held that Copperweld Corp. v. Independence
Tube Corp., 467 U.S. 752 (1984), supported the following
rule: a wholly-owned subsidiary that engaged in coordinated
activity in furtherance of the anticompetitive scheme of its
parent and/or commonly owned affiliates is deemed to
engage in such coordinated activity with the purposes of the
single “economic unit” of which it was a part.

    The panel held that plaintiffs raised a triable issue of
CES’s anticompetitive intent. Specifically, the panel held
that: plaintiffs submitted evidence that Reliant’s “economic
unit” had an anticompetitive purpose during the class period;
such anticompetitive “purpose” could sustain liability under
the federal Sherman Act with or without an additional
finding of knowledge; and Reliant’s alleged illegal purposes
are imputed to CES’s coordinated activities.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
       ARANDELL V. CENTERPOINT ENERGY SERVS.                3

    The panel held that plaintiffs’ evidence was sufficient to
raise a triable issue of whether CES knowingly acted to
further the alleged price-fixing scheme. The panel further
held that any knowledge of the alleged price-fixing scheme
that CES’s directors and officers acquired while
concurrently acting as directors or officers of the other
Reliant companies was imputable to CES as a matter of
Wisconsin law.

    The panel held that plaintiffs submitted sufficient
evidence to raise a genuine issue under the Sherman Act –
and Wisconsin Statute § 133.03(1) – as to whether CES
participated in coordinated activity in furtherance of the
alleged inter-enterprise price-fixing conspiracy.

                        COUNSEL

Ryan M. Billings (argued), Amy Irene Washburn, Melinda
A. Bialzik, and Robert L. Gegios, Kohner Mann & Kailas
S.C., Milwaukee, Wisconsin, for Plaintiffs-Appellants.

Mark Russell Robeck (argued) and Travis G. Cushman,
Kelley Drye & Warren LLP, Washington, D.C. for
Defendants-Appellees.
4       ARANDELL V. CENTERPOINT ENERGY SERVS.

                          OPINION

BEA, Circuit Judge:

    Here we have a wholly owned subsidiary company
which sold natural gas to Plaintiffs. It asserts that it acted
innocently and without knowledge of its parent company’s
price-fixing scheme, which had pumped up the price of that
gas. Yes, the subsidiary company sold the gas at prices
previously rigged by the parent, and yes, the subsidiary sent
the profits back to the parent. But the subsidiary asserts there
is no evidence that it knew the prices were inflated or that it
had the purpose to carry out the price-fixing scheme. Under
Wisconsin antitrust law, can the subsidiary be liable to
Plaintiffs? Because Supreme Court precedent establishes
that “a parent and a wholly owned subsidiary always have a
‘unity of purpose’” and thus act as a “single enterprise”
whenever they engage in “coordinated activity,”
Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752
(1984) (emphasis added), we conclude that it can.

I. BACKGROUND

     Most consumers of natural gas in North America are
individuals or small businesses who buy their gas from local
utility companies.       However, some larger and more
sophisticated businesses bypass their local utility and
purchase gas directly from the companies that sell gas to the
local utilities. These large commercial customers enter
contracts to buy agreed-upon quantities of gas and take
delivery via high-volume gas pipelines. While these
contracts typically specify the quantity to be delivered, the
price is typically left to be determined by reference to the
market price at the time of delivery, as reported in the latest
price index published by a designated trade publication. For
example, a contract might provide that the price of a delivery
         ARANDELL V. CENTERPOINT ENERGY SERVS.                              5

of natural gas would be “the Inside FERC index plus $x.”
Such contracts to purchase gas on the cash market and take
physical delivery of natural gas are referred to as “physical”
contracts (as opposed to financial or “futures” contracts). 1

    In the early 2000s, natural gas prices rose dramatically,
due in part to manipulative trading practices of some of the
nation’s largest natural gas conglomerates. In March 2003,
the Federal Energy Regulatory Commission (FERC)
published a report on “whether and, if so, the extent to which
California and Western energy markets were manipulated
during 2000 and 2001.” See FERC, Final Report on Price
Manipulation in Western Markets: Fact-Finding
Investigation of Potential Manipulation of Electric and
Natural Gas Prices, at ES-1 (Mar. 2003), available at
https://www.ferc.gov/legal/maj-ord-reg/land-docs/PART-I-
3-26-03.pdf (“FERC Final Report”). The report “found
significant market manipulation” by gas marketing
companies such as Enron, for example. Id. at ES-1–ES-2.
In particular, FERC discovered widespread “efforts to
manipulate price indices compiled by trade publications”

     1
       To protect against the risk that the price of natural gas will increase
before the delivery date, many sophisticated gas purchasers seek to
“hedge” by purchasing natural gas futures contracts—standardized
contracts for the sale and purchase of natural gas at a specific price in the
future—which are resolved financially (i.e., by selling the contractual
interest for cash or otherwise liquidating the gas interest) rather than by
taking delivery of gas. A properly executed hedging strategy negates
any loss or gain on the physical purchase due to changes in the price of
gas, as the physical gas customer stands in the position of a natural gas
seller for purposes of the futures contract. Ideally, the “buy” position on
the physical contract and the “sell” position on the futures contract
counterbalance each other so that the physical gas purchaser is left with
a net cost for natural gas equal to the price of natural gas at the time it
entered the physical gas contract.
6        ARANDELL V. CENTERPOINT ENERGY SERVS.

primarily through “[r]eporting of false data” to the trade
publications, “wash trading,” 2 and a trading activity known
as “churning.” 3 Id. at ES-1–ES-5. The report determined
that energy trading companies had few, if any, internal
controls in place to ensure the accuracy of the data reported
to trade publications. FERC Final Report at III-3.
Ultimately, the report found that price manipulation was a
substantial cause of “[d]ysfunctions in the natural gas
market” which led to “extraordinary” increases in gas prices
in 2000 and 2001. Id. at ES-1.

    Various plaintiff groups filed class-action lawsuits
around the country, in both state and federal courts, and
alleged that natural gas traders manipulated the price of
natural gas by reporting false information to price indices
published by trade publications and engaging in wash sales.
See In re W. States Wholesale Nat. Gas Antitrust Litig.,
715 F.3d 716, 727 (9th Cir. 2013), aff’d sub nom. Oneok,
Inc. v. Learjet, Inc., 135 S. Ct. 1591 (2015). These actions

    2
       A “wash trade” is “a prearranged pair of trades of the same good
between the same parties, involving no economic risk and no net change
in beneficial ownership. These trades expose the parties to no monetary
risk and serve no legitimate business purpose.” Such trades were alleged
to have “exaggerated market demand for natural gas and thus
manipulate[d] natural gas prices.”

     3
       “Churning” is “a pattern of natural gas purchases and sales”
wherein (a) the gas marketing companies “both bought and sold during
the trading interval, so that the trades largely offset each other,”
(b) “gross trading volume greatly exceeded net trading volume,” and
(c) the companies “made a relatively large number of consecutive
purchases and/or sales in a short amount of time, often being the only
buyer and/or seller during the burst of transactions.” “Churning”
allegedly enabled the companies to “artificially manipulate the day’s
average price by initially buying (which raised the prices), and then
selling (which brought prices back down).”
         ARANDELL V. CENTERPOINT ENERGY SERVS.                        7

were eventually consolidated into a multi-district litigation
proceeding in the District of Nevada, In re W. States
Wholesale Nat. Gas Antitrust Litig., MDL No. 1566 (the
“MDL”); see also In re W. States, 715 F.3d at 727. The
MDL includes the instant action.

    Plaintiffs (collectively known in the MDL below as the
“Arandell Plaintiffs”) filed this action in Wisconsin state
court on December 15, 2006, on behalf of a proposed class
of “all industrial and commercial purchasers of natural gas”
who purchased natural gas “for their own use or
consumption . . . in Wisconsin” between January 1, 2000,
and October 31, 2002 (the “Class Period”). The defendants
are ten large natural gas companies, including certain of their
subsidiaries and affiliates, who allegedly colluded to fix
retail natural gas prices in Wisconsin. The action was
removed on the basis of diversity jurisdiction to the Western
District of Wisconsin on February 9, 2007. On June 29,
2007, the case was transferred to the MDL in the District of
Nevada.

    This appeal is from the district court’s grant of summary
judgment to one defendant in the Arandell case, CenterPoint
Energy Services, Inc. (“CES”). 4 CES sold natural gas and
related services to commercial and industrial customers in
Wisconsin during the Class Period. From January 1, 2000,
to August 31, 2002 (33 of the 34 months in the Class Period),
CES was a wholly owned subsidiary of Reliant Energy, Inc.

    4
       Like the parties’ briefs, we refer to CenterPoint Energy Services
by its current name. However, CES was known as Retail Energy Retail,
Inc. during the Class Period.
8        ARANDELL V. CENTERPOINT ENERGY SERVS.

(“Old Reliant”). 5 Within the Reliant family of companies,
CES dealt primarily with Reliant Energy Services, Inc.
(“RES” and together with Old Reliant and the other Reliant
co-defendants collectively “Reliant”), a commonly owned
affiliate during most of the Class Period.6 Reliant has
admitted to engaging in wash trades during the Class Period
and has reached settlements with several government
agencies regarding its manipulative trading practices during
that time.

     In this action, Plaintiffs alleged that certain Reliant
entities—including CES, Old Reliant, and RES—conspired
with other natural gas conglomerates to fix retail natural gas
prices in Wisconsin. Plaintiffs further alleged that CES in
particular sold natural gas in Wisconsin at prices that were
artificially inflated as a result of the price-fixing conspiracy
between Reliant and other, non-Reliant co-conspirators.
Plaintiffs alleged two causes of action under Wisconsin’s

    5
      From January 1, 2000, to August 31, 2002, CES was a wholly
owned subsidiary of Reliant Energy Resources Corp., which, in turn, was
a wholly owned subsidiary of Old Reliant.
    6
       During the Class Period, Old Reliant was in the process of
restructuring its business pursuant to a plan filed with the Texas Public
Utility Commission as required by Texas law. From January 1, 2000, to
January 1, 2001 (the first year of the Class Period), CES and RES were
both wholly owned subsidiaries of RERC, which was itself wholly
owned by Old Reliant. The first phase of the restructuring was
completed on January 1, 2001 (one year into the Class Period). After
January 1, 2001, Old Reliant owned 83% of RES (through a new
company, Reliant Resources Inc.), while CES remained wholly owned
(through RERC). Reliant completed the restructuring one month before
the end of the Class Period. As of September 30, 2002, the restructuring
of Old Reliant resulted in two independent, publicly traded companies:
Reliant Resources, Inc. (“New Reliant”), which owned RES, and
CenterPoint Energy, Inc., which owned CES.
        ARANDELL V. CENTERPOINT ENERGY SERVS.                  9

antitrust statutes, seeking (1) a declaratory judgment that
certain natural gas contracts made during the Class period
are void under Wisconsin Statute § 133.14, and (2) treble
damages for violations of Wisconsin Statute § 133.03, which
provides that “[e]very contract, combination in the form of
trust or otherwise, or conspiracy, in restraint of trade or
commerce is illegal.”

    In the MDL, the district court granted CES’s motion for
summary judgment against the Plaintiffs’ Third Amended
Complaint (“TAC”). CES argued that it was entitled to
summary judgment because it was “not alleged to have
engaged in any anticompetitive activity or other wrongdoing
in or directed to Wisconsin,” but rather it was alleged only
to have been affiliated with RES and to have sold gas to
Wisconsin consumers. The district court agreed that
Plaintiffs had not raised a genuine issue of material fact
sufficient to support a verdict or judgment under Wisconsin
Statute § 133.03(1) because there was “no evidence” that
CES knowingly “participated in a conspiracy or direct acts
in restraint of trade.” In particular, the court ruled that there
was no evidence that CES “knowingly” engaged in swaps
“in conspiracy with RES” for “the purpose of increasing the
price of natural gas,” or that CES “knew that RES or others
were engaged in such behavior.”

    On appeal, Plaintiffs summarized their case against CES
as follows:

        CES (formerly a Reliant company) made an
        essential contribution to the Reliant
        companies’ coordinated price-fixing efforts.
        Each Reliant company played a necessary
        role. The Reliant trading company (RES)
        inflated retail natural gas prices through
        manipulative trading and false reporting of
10      ARANDELL V. CENTERPOINT ENERGY SERVS.

       sales data to publishers of benchmark price
       indices. RES then sold gas at inflated prices
       to CES, the Reliant sales subsidiary. CES
       resold the overpriced gas to Wisconsin
       businesses, collected millions of dollars in
       overcharges at the expense of the class
       members, and funneled the revenues from
       these sales to the Reliant parent. The officers
       and directors of the Reliant parent
       orchestrated this scheme, directing RES to
       manipulate retail prices and instructing CES
       to send its illegal profits to the Reliant parent.

Plaintiffs argue the district court erred in: (1) determining
that Plaintiffs needed to produce evidence that CES
intentionally conspired with RES to inflate gas prices in
order to raise a triable issue, (2) failing to consider record
evidence that CES purposely or knowingly furthered the
alleged inter-enterprise conspiracy by selling gas at rigged
prices and channeling the proceeds to Old Reliant, and
(3) granting summary judgment without considering the
Plaintiffs’ Rule 56(d) motion for additional discovery.

II. DISCUSSION

    We review the district court’s grant of summary
judgment de novo. Kaiser Cement Corp. v. Fischbach &
Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986). “[T]he
court’s ultimate inquiry is to determine whether the ‘specific
facts’ set forth by the nonmoving party, coupled with
undisputed background or contextual facts, are such that a
rational or reasonable jury might return a verdict in its favor
based on that evidence.” T.W. Elec. Serv., Inc. v. Pac. Elec.
Contractors Ass’n, 809 F.2d 626, 631 (9th Cir. 1987). For
purposes of summary judgment, CES does not contest the
        ARANDELL V. CENTERPOINT ENERGY SERVS.                11

substance of Plaintiffs’ evidence that one or more of the
other Reliant entities successfully conspired with non-
Reliant entities to manipulate gas prices during the Class
Period, or that CES bought gas from RES and sold it to
consumers in Wisconsin during the Class Period. Therefore,
the question before the court is whether Plaintiffs submitted
sufficient evidence to raise triable issues as to (1) whether
CES had the requisite intent and purpose to restrain trade,
and (2) whether CES did in fact act to further the alleged
conspiracy. We address each in turn.

   A. Anticompetitive Intent

    Wisconsin courts’ interpretation of Wisconsin Statute
§ 133.03 “is controlled by federal court decisions under the
Sherman Act.” Ford Motor Co. v. Lyons, 405 N.W.2d 354,
367 (Wis. Ct. App. 1987). Section 1 of the Sherman Act
provides that “[e]very contract, combination . . . , or
conspiracy, in restraint of trade or commerce among the
several States, or with foreign nations, is declared to be
illegal.” 15 U.S.C. § 1. A defendant may be held “liable
under § 1 of the Sherman Act if that person . . . [acted] either
with the knowledge that the . . . [action] would have
unreasonable anticompetitive effects or with the purpose of
producing those effects.” United States v. Bailey, 444 U.S.
394, 404–05 (1980). Plaintiffs argue that the evidence
submitted below established that CES purposely participated
in the price-fixing scheme because, as a wholly owned
subsidiary of Reliant during the Class Period, CES is deemed
to have shared the intent of the commonly owned Reliant
conspirators. Plaintiffs also argue that they submitted
evidence showing overlap among the directors and managers
of CES, on one hand, and the alleged Reliant conspirators,
on the other—creating a genuine issue of material fact as to
12      ARANDELL V. CENTERPOINT ENERGY SERVS.

whether CES knowingly participated in the price-fixing
scheme.

       1. Purpose

    Plaintiffs argue that, contrary to the district court’s
decision, Wisconsin antitrust law did not require them to
prove “that CES knowingly engaged ‘in [a] conspiracy with
RES . . . with the purpose of increasing the price of natural
gas” to create a triable issue as to CES’s liability. According
to Plaintiffs, the “Copperweld doctrine”—named for the
U.S. Supreme Court case Copperweld Corp. v.
Independence Tube Corp., 467 U.S. 752 (1984)—
establishes that “the Reliant Defendants that participated in
price-fixing (CES, RES, and REI) acted as a single
enterprise, with a shared intent.” Copperweld—like all
federal antitrust precedents—is applicable to claims under
Wisconsin Statute § 133.03. Lyons, 405 N.W.2d at 367
(adopting and following Copperweld as a matter of
Wisconsin law).

    In Copperweld, the plaintiff alleged that Copperweld and
its wholly owned subsidiary, Regal Tube Co. (“Regal”),
conspired to prevent a former Regal employee from
competing with Regal by threatening to sue prospective
customers and financers of the former employee’s new
business. Id. at 755–58. A jury found that Copperweld and
Regal violated Section 1 of the Sherman Act, and the
Seventh Circuit affirmed. Id. at 758. The Supreme Court
reversed. Id. at 777. Rejecting “the so-called ‘intra-
enterprise conspiracy’ doctrine,” which permitted Section 1
liability between commonly owned companies, id. at 759,
the Court held that “the coordinated activity of a parent and
its wholly owned subsidiary must be viewed as that of a
single enterprise for purposes of § 1” because “[a] parent and
its wholly owned subsidiary have a complete unity of
         ARANDELL V. CENTERPOINT ENERGY SERVS.                      13

interest,” id. at 771. Therefore, a parent company and its
wholly owned subsidiary “are incapable of conspiring with
each other for purposes of § 1 of the Sherman Act.” Id. at
777. As relevant here, the Copperweld doctrine establishes
that “[w]here there is substantial common ownership, . . .
individual firms function as an economic unit and are
generally treated as a single entity.” Freeman v. San Diego
Ass’n of Realtors, 322 F.3d 1133, 1147–48 (9th Cir. 2003).

    The district court was correct that, for antitrust purposes,
CES did not conspire with RES; under Copperweld, it was
incapable of doing so as a matter of law. But Plaintiffs’
theory of the case is that CES was part of a “single entity”—
including both RES (a commonly owned company) and Old
Reliant (its parent)—which “intentionally colluded with
other, non-Reliant conspirators to manipulate natural gas
prices and profit from this manipulation.” 7 Therefore, they
argue, the district court should have found that as a matter
of law it was “not possible for CES to have a different reason
than [Old Reliant] and RES for participating in these
efforts.”

    Although the Plaintiffs’ application of the principles laid
out in Copperweld is novel, we must agree. The Supreme
Court stated in Copperweld that a parent and its wholly
owned subsidiary “always have a ‘unity of purpose or a
common design.’ They share a common purpose whether or
not the parent keeps a tight rein over the subsidiary.”
Copperweld, 467 U.S. at 771 (emphasis added); see also
Freeman, 322 F.3d at 1147–48 (“Where there is substantial

    7
       For purposes of summary judgment, CES does not contest the
substance of the evidence that Reliant successfully conspired with the
other (non-Reliant) defendants and co-conspirators to manipulate retail
gas prices.
14     ARANDELL V. CENTERPOINT ENERGY SERVS.

common ownership, . . . individual firms function as an
economic unit and are generally treated as a single entity.”).
The Supreme Court could have hardly made this point more
explicit:

       The coordinated activity of a parent and its
       wholly owned subsidiary must be viewed as
       that of a single enterprise for purposes of § 1
       of the Sherman Act. A parent and its wholly
       owned subsidiary have a complete unity of
       interest. Their objectives are common, not
       disparate; their general corporate actions are
       guided or determined not by two separate
       corporate consciousnesses, but one. They are
       not unlike a multiple team of horses drawing
       a vehicle under the control of a single driver.
       With or without a formal “agreement,” the
       subsidiary acts for the benefit of the parent,
       its sole shareholder.

       . . . [I]n reality a parent and a wholly owned
       subsidiary always have a “unity of purpose or
       a common design.” They share a common
       purpose whether or not the parent keeps a
       tight rein over the subsidiary; the parent may
       assert full control at any moment if the
       subsidiary fails to act in the parent’s best
       interests.

Copperweld, 467 U.S. at 771–72 (emphases added). This
premise led the Supreme Court to conclude that a parent
cannot conspire with its subsidiary, but it also leads
inescapably to the corollary conclusion that, for antitrust
purposes, it is legally impossible for firms within a single
“economic unit” to act together in furtherance of the same
         ARANDELL V. CENTERPOINT ENERGY SERVS.                      15

price-fixing scheme for independent and distinct purposes.
True, Copperweld decided only that a parent and its wholly
owned subsidiary could not conspire with each other for
purposes of Section 1 of the Sherman Act, but “[a]s a general
rule, the principle of stare decisis directs us to adhere not
only to the holdings of our prior cases, but also to their
explications of the governing rules of law.” Miller v.
Gammie, 335 F.3d 889, 900 (9th Cir. 2003) (quoting Cty. of
Allegheny v. ACLU Greater Pittsburgh Chapter, 492 U.S.
573, 668 (1989) (Kennedy, J., concurring in part and
dissenting in part)).        From the Supreme Court’s
“explications” in Copperweld, the corollary proposed by
Plaintiffs necessarily follows: If “a parent and a wholly
owned subsidiary always have a ‘unity of purpose’” and act
as a “single enterprise” whenever they engage in
“coordinated activity,” then a subsidiary such as CES as a
matter of law cannot innocently advance an anticompetitive
scheme (here, by selling gas at prices rigged by Reliant and
distributing the profits to Reliant) for a legitimate business
purpose, while its parent and sister companies purposely
advance the very same scheme (here, by rigging the prices
upstream) for an illegal, anticompetitive purpose.

    The Tenth Circuit, so far the only Court of Appeals
squarely to consider such an application of Copperweld,
recently reached the same conclusion in Lenox MacLaren
Surgical Corp. v. Medtronic, Inc., 847 F.3d 1221 (10th Cir.
2017). There, the district court had granted summary
judgment to the defendant on claims under Section 2 of the
Sherman Act. 8 Id. at 1229–30. The plaintiff in Lenox argued

    8
       Lenox dealt with a claim under Section 2 of the Sherman Act.
847 F.3d at 1229. Section 2 provides that “[e]very person who shall
monopolize, or attempt to monopolize, or combine or conspire with any
other person or persons, to monopolize any part of the trade or commerce
16       ARANDELL V. CENTERPOINT ENERGY SERVS.

that “its burden of establishing any individual defendant’s
liability required showing only that the defendant’s conduct
played a ‘role’ in the overall anticompetitive scheme
perpetrated by the enterprise as a whole.” Id. at 1230. The
Tenth Circuit panel agreed. It held that, under Copperweld,
the plaintiff did not need to prove that “‘specific Defendants’
independently satisfied each necessary element of the
claims,” because “in a single-enterprise situation, it is the
affiliated corporations’ collective conduct—i.e., the conduct
of the enterprise they jointly compose—that matters; it is the
enterprise which must be shown to satisfy the elements of a
[Section 2] claim.” Id. at 1236 (emphasis in original).
Therefore, the Tenth Circuit panel concluded that the
plaintiff “advanced a viable, if somewhat unusual, antitrust
theory.” Id. at 1230. Ultimately, the court granted summary
judgment to the defendants on the basis of claim preclusion.
Id. at 1239. One of the companies in the “single entity”
identified by the court had previously won a final judgment
on the merits on claims based on the same underlying events.
See id. at 1239–40. Applying the plaintiffs’ Copperweld
theory, claims against other defendants in the “single entity”
were thus precluded. Id. at 1239.

    Defendants cannot have the Copperweld doctrine both
ways. It would be inconsistent to insist both (1) that two
affiliates are incapable of conspiring with each other for
purposes of Section 1 of the Sherman Act because they
“always” share a “unity of purpose,” and (2) that one affiliate
may escape liability for its own conduct—conduct necessary
to accomplish the illegal goals of the scheme—by

among the several States, or with foreign nations, shall be deemed guilty
of a felony.” 15 U.S.C. § 2. However, the Tenth Circuit panel based its
holding on Copperweld, a Section 1 case, which it held to apply equally
to Section 2 cases. Id. at 1234.
       ARANDELL V. CENTERPOINT ENERGY SERVS.               17

disavowing the anticompetitive intent of the other, even
where the two acted together. See id. at 1236 (finding that
Copperweld “forecloses” a result that would allow
sophisticated companies to evade Section 2 liability by
spreading anticompetitive schemes over multiple affiliates).
In sum, Copperweld supports the following rule: A wholly
owned subsidiary that engages in coordinated activity in
furtherance of the anticompetitive scheme of its parent
and/or commonly owned affiliates is deemed to engage in
such coordinated activity with the purposes of the single
“economic unit” of which it is a part.

     Here, Plaintiffs submitted evidence that the Reliant
“economic unit” had an anticompetitive purpose during the
Class Period. Such anticompetitive “purpose” can sustain
liability under the Sherman Act with or without an additional
finding of “knowledge,” Bailey, 444 U.S. at 404–05; United
States v. U.S. Gypsum Co., 438 U.S. 422, 446 (1978) (stating
that requiring proof of both knowledge and purpose for
liability under Section 1 of the Sherman Act would be
“unnecessarily cumulative”). Therefore, because the Reliant
enterprise’s alleged illegal purposes are imputed to CES’s
coordinated activities, the district court erred in granting
summary judgment on the basis that Plaintiffs failed to raise
a triable issue of CES’s intent.

       2. Knowledge

     Furthermore, Plaintiffs’ evidence was sufficient to raise
a triable issue of whether CES knowingly acted to further the
alleged price-fixing scheme. Plaintiffs submitted evidence
of substantial overlap, during the Class Period, between the
directors and officers of CES, on one hand, and the directors
and officers of Old Reliant, RES, and other commonly
owned Reliant entities. For example, it is undisputed that
(1) Marc Kilbride was the Treasurer for CES from 2000 to
18     ARANDELL V. CENTERPOINT ENERGY SERVS.

2002, and also the Treasurer for RES in 2000 and for RERC
from 2000 to 2003, (2) David M. McClanahan served as the
Chairman of CES’s board of directors in 2002, after having
served as the President and sole director of RERC from 2001
to 2002, and (3) Hugh Rice Kelly was the Corporate
Secretary for CES in 2000, General Counsel and Corporate
Secretary to Old Reliant from 2000 to 2001, and then the
Corporate Secretary for RES in 2002. Plaintiffs’ evidence
shows a network of fast-revolving doors connecting the
boardrooms and executive offices of CES and the other
Reliant companies.

    Any knowledge of the alleged price-fixing scheme that
CES’s directors and officers acquired while concurrently
acting as directors or officers of the other Reliant companies
is imputable to CES as a matter of Wisconsin law. Suburban
Motors of Grafton, Inc. v. Forester, 396 N.W.2d 351, 355
(Wis. Ct. App. 1986) (“The general rule is well established
that a corporation is charged with constructive knowledge,
regardless of its actual knowledge, of all material facts of
which its officer or agent receives notice or acquires
knowledge while acting in the course of his employment
within the scope of his authority, even though the officer or
agent does not in fact communicate his knowledge to the
corporation.” (quoting 3 W. Fletcher, Cyclopedia of the Law
of Private Corporations § 790 (rev. perm. ed. 1975)
(footnotes omitted and alteration in original))). Plaintiffs
submitted evidence that Reliant traders engaged in
manipulative trade practices at the direction of Reliant
management. Plaintiffs also submitted evidence that such
manipulative practices were a matter of common knowledge
within Reliant. Drawing all rational inferences in favor of
Plaintiffs, these facts permit a reasonable finding that CES’s
directors or officers acquired knowledge of Reliant’s
manipulative trading practices while concurrently serving as
         ARANDELL V. CENTERPOINT ENERGY SERVS.                       19

directors or officers of other Reliant companies. T.W. Elec.,
809 F.2d at 631 (holding that “[i]nferences must . . . be
drawn in the light most favorable to the nonmoving party”
so long as “it is ‘rational’ or ‘reasonable’ and otherwise
permissible under the governing substantive law”). Because
such knowledge would be imputed to CES as a matter of
Wisconsin law, Plaintiffs raised a genuine issue of material
fact as to CES’s knowledge of the alleged price-fixing
scheme.

    B. Anticompetitive Acts

    We next consider whether there was a genuine issue of
material fact as to whether CES acted to further the alleged
price-fixing conspiracy. As Plaintiffs admit, Copperweld
speaks only of a “unity of purpose,” 467 U.S. at 771
(emphasis added). It does not supply a theory of unbounded
vicarious liability for the acts of legally distinct entities.
Rather, Copperweld states that commonly-owned-but-
legally-distinct entities are considered a “single entity” for
antitrust purposes where they engage in “coordinated
activity.” 9 See 467 U.S. at 771 (“The coordinated activity
of a parent and its wholly owned subsidiary must be viewed
as that of a single enterprise for purposes of § 1 of the
Sherman Act.” (emphasis added)). Thus, a subsidiary shares
the purposes and intentions of the parent when it acts in

      9
        This distinction provides a bright-line limit on an antitrust
plaintiff’s recovery from a particular defendant. While a “veil-piercing,
alter ego, or respondeat superior theory” might render a defendant
separately and individually liable for any conduct of its corporate
affiliates, Plaintiffs’ theory seeks to hold CES liable only for its own
alleged anticompetitive acts. See Lenox, 847 F.3d at 1237. Therefore,
any recovery from an affiliate under Plaintiffs’ Copperweld corollary
would be limited to damages caused by anticompetitive conduct
attributable to that affiliate.
20       ARANDELL V. CENTERPOINT ENERGY SERVS.

coordination with the parent, but Copperweld does not
support holding a subsidiary liable for the parent’s
independent conduct. See Lenox, 847 F.3d at 1237
(“[A]lthough we agree that [the plaintiff] was entitled to
pursue its § 2 claims against Defendants as a single
enterprise, and to prove those claims based on the actions of
the enterprise as a whole, [the plaintiff] was still required to
come forward with evidence that each defendant
independently participated in the enterprise’s scheme, to
justify holding that defendant liable as part of the
enterprise.”). As with any antitrust defendant, Plaintiffs
must put forth evidence that CES engaged in anticompetitive
conduct. 10

    To be liable on a Section 1 claim, a defendant must have
conspired (or agreed or combined, etc.) to restrain trade. “It
is not necessary to find an express agreement, either oral or
written, in order to find a conspiracy, but it is sufficient that

     10
        The cases cited by CES merely apply this distinction, and thus
they are not contrary to Plaintiffs’ “single entity” theory. See In re Ins.
Brokerage Antitrust Litig., 618 F.3d 300, 341 n.44 (3d Cir. 2010) (noting
the defendant subsidiaries were not alleged to have actually participated
in the alleged bid-rigging scheme); Mitchael v. Intracorp, Inc., 179 F.3d
847, 857 (10th Cir. 1999) (rejecting “single enterprise” theory “[i]n the
absence of any specific evidence of coordinated activity” and
distinguished on this basis in Lenox, 847 F.3d at 1234); Acuity Optical
Labs., LLC v. Davis Vision, Inc., No. 14-cv-03231, 2016 WL 4467883,
at *9 (C.D. Ill. Aug. 23, 2016) (finding no “actual evidence” of
“coordinated activity”); Vollrath Co. v. Sammi Corp., No. CV 85-820
MRP,1989 WL 201632, at *20–21 (C.D. Cal. Dec. 20, 1989) (finding no
evidence of an inter-enterprise conspiracy and thus no actionable
conspiracy under Copperweld); cf. Am. Needle, Inc. v. Nat’l Football
League, 560 U.S. 183, 195–96 (2010) (holding that separately owned
NFL teams were not a “single entity” under Copperweld). Cases
addressing veil-piercing, alter-ego, and respondeat-superior theories are
likewise inapposite.
        ARANDELL V. CENTERPOINT ENERGY SERVS.                21

a concert of action be contemplated and that defendants
conform to the arrangement.” Esco Corp. v. United States,
340 F.2d 1000, 1008 (9th Cir. 1965). “[A]ny conformance
to an agreed or contemplated pattern of conduct will warrant
an inference of conspiracy.” Id. Therefore, CES’s alleged
contributions to the conspiracy (selling gas to Wisconsin
consumers at the inflated prices and disbursing the profits to
Reliant), would be adequate circumstantial evidence of
conspiracy, if proved, to permit a finding of liability.

    This conclusion comports with ordinary conspiracy
principles.      “While particularly true of price-fixing
conspiracies, it is well recognized law that any conspiracy
can ordinarily only be proved by inferences drawn from
relevant and competent circumstantial evidence, including
the conduct of the defendants charged.” Id. at 1007. Thus,
even in the criminal context, the government “need show
neither direct contact nor explicit agreement among all of the
alleged conspirators.” United States v. Reese, 775 F.2d
1066, 1071 (9th Cir. 1985). Nor must the government show
“that each defendant or all defendants must have participated
in each act or transaction.” Esco, 340 F.2d at 1006.
Involvement “in but two of ten allegedly conspirational [sic]
situations does not absolve [a defendant] from participation
in the entire conspiracy if its involvement in the two was
unlawful and knowingly and purposely performed.” Id. at
1008. Nor can a single defendant “join a continuing
conspiracy long after others have commenced it, or partially
carried it out, and thereby claim immunity either for his
actions, or for those of others taking place before or after his
active participation, as long as he remains an active
participant.” Id. at 1006 (emphasis added and citation
omitted). In sum, CES may be held liable for its own acts in
purposeful and knowing furtherance of the alleged inter-
enterprise price-fixing conspiracy, if proven.
22        ARANDELL V. CENTERPOINT ENERGY SERVS.

    The remaining question is whether Plaintiffs submitted
sufficient evidence to raise a genuine issue as to whether
CES in fact participated in coordinated activity in
furtherance of the alleged inter-enterprise price-fixing
conspiracy. 11 Plaintiffs submitted evidence that, during the
Class Period, CES sold gas at rigged prices and then
distributed the proceeds up to its parent’s coffers. CES does
not deny that it sold gas it purchased from RES to consumers
in Wisconsin.12 Plaintiffs also submitted evidence that the
profits from CES’s natural gas sales “rolled up” to Reliant
and its shareholders, and that Reliant would report those
distributions as revenues in its consolidated financial
reports.

    This evidence suffices to create a triable issue of liability
under the Sherman Act, and thus it suffices under Wisconsin
Statute § 133.03(1) as well. Crediting Plaintiffs’ evidence,
CES’s role was essential to securing the benefit of the other
Reliant defendants’ price-fixing (at least in Wisconsin), and
CES’s acts were the immediate cause of Plaintiffs’ injuries.
T.W. Elec., 809 F.2d at 631 (“If the nonmoving party
produces direct evidence of a material fact, the court may not
assess the credibility of this evidence nor weigh against it
any conflicting evidence presented by the moving party.”).
In selling gas at rigged prices and distributing the inflated

     11
        Again, for purposes of summary judgment, CES does not contest
the substance of Plaintiffs’ evidence that one or more Reliant companies
successfully conspired with non-Reliant defendants and co-conspirators
to manipulate the prices of gas sold by CES during the Class Period. See
FERC Final Report at ES-5 (describing churning by Reliant in 2000 and
2001).
     12
      The parties dispute how much gas CES sold in Wisconsin, how
much money CES received for that gas, and how much of that gas came
from RES. These are issues for the trier of fact.
        ARANDELL V. CENTERPOINT ENERGY SERVS.               23

profits to its parent, CES helped to carry out the inter-
enterprise conspiracy with the other gas companies (just as
Reliant allegedly carried out the conspiracy by reporting
sham sales to the trade publications). CES’s role was not
only helpful to the conspirators, it was crucial: Until CES
sold the gas to consumers, the rigged and inflated prices
were not passed on to buyers outside of the Reliant economic
unit and there was no gain to the Reliant enterprise. Cf.
United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 253
(1940) (noting that an alleged antitrust conspiracy “would
fail” if the conspirators could not charge higher prices to the
“jobbers and consumers”). “[T]he conspiracy contemplated
and embraced, at least by clear implication, sales to . . .
consumers . . . at the enhanced prices. The making of those
sales supplied part of the ‘continuous cooperation’ necessary
to keep the conspiracy alive.” Id.

    CES argues that “sales to Wisconsin customers were
unnecessary for RES to profit from the alleged conspiracy”
because “RES would accrue any purported benefit of
increased prices once RES’s sale occurred—whether to CES
or any other customer.” But this argument ignores
Copperweld’s instruction to treat RES and CES as part of a
“single entity.” CES’s and RES’s respective balance sheets
may have changed when CES bought gas from RES, but the
Reliant enterprise did not benefit until Reliant gas was sold
to someone outside the enterprise. Reliant could not profit
by moving cash from its right pocket to its left.

    CES’s critical contributions to the conspiracy, if proved,
would permit a rational factfinder to find that CES joined the
conspiracy. Because CES is deemed to have engaged in this
coordinated activity with the alleged illegal purpose of its
affiliates, Plaintiffs have raised a triable issue of CES’s
liability under Wisconsin antitrust law. Accordingly, the
24     ARANDELL V. CENTERPOINT ENERGY SERVS.

district court’s grant of summary judgment is reversed.
Because we reverse the district court’s grant of summary
judgment, we need not and do not reach Plaintiffs’ challenge
to that order based on Rule 56(d). See Longoria v. Pinal
Cty., 873 F.3d 699, 711 (9th Cir. 2017).

   REVERSED and REMANDED. Appellee’s motion to
supplement the record on appeal, filed April 24, 2017, is
DENIED.