The opinion of the court was delivered by: BECKER
[EDITOR'S NOTE: Part 1 of 3]
This opinion addresses defendants' motions for summary judgment as to plaintiffs' conspiracy claims under § 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, as well as their claims under § 2 of the Sherman Act, 15 U.S.C. § 2, § 73 et seq. of the Wilson Tariff Act, 15 U.S.C. § 8 et seq., § 7 of the Clayton Act, 15 U.S.C. § 18, and the Robinson-Patman Act, 15 U.S.C. § 13(a). For reasons which will be set forth herein at length, we will grant defendants' motions.
As will be seen, the touchstone of this decision lies in the fact that our intensive examination of the enormous record in this case has revealed that, despite years of discovery, the plaintiffs have failed to uncover any significant probative evidence that the defendants entered into an agreement or acted in concert with respect to exports to the United States in any manner which could in any way have injured the plaintiffs.
The pretrial evidentiary or "in limine " hearings were primarily designed to evaluate the admissibility of the principal evidence that plaintiffs advanced in opposition to the defendants' motions for summary judgment respecting plaintiffs' conspiracy claims. The hearings were necessary because a summary judgment motion must be decided upon evidence that would be admissible or usable at trial, and defendants had challenged the admissibility of much of plaintiffs' proposed evidence.
In addition, the hearings were designed to afford plaintiffs the opportunity to present sufficient evidence aliunde of the existence of a conspiracy and its membership to permit the admission into evidence of the hearsay statements of coconspirators under F.R.E. 801(d)(2) (E). See Part VI.D.6, infra.
The hearings spawned a trilogy of lengthy and extremely detailed opinions. The first, filed August 7, 1980, 505 F. Supp. 1125, addressed the admissibility of certain public records and reports under F.R.E. 803(8)(C); the second, filed September 29, 1980, 505 F. Supp. 1190, concerned the admissibility of materials relating to activities in Japan; and the third, filed December 10, 1980, 505 F. Supp. 1313, dealt with the admissibility of plaintiffs' expert testimony. Because these opinions, which will be summarized in Part IV, infra, exclude the most critical evidence in plaintiffs' case, they impact significantly upon the present summary judgment motion. Therefore, we consider the evidentiary trilogy an integral part of this opinion and hereby incorporate it by reference herein.
We shall not herein discourse upon the complexity of this case. Our opinion on the jury trial issue, 478 F. Supp. 889 (E.D.Pa.1979), and that of the Court of Appeals, 631 F.2d 1069 (3d Cir. 1980), as well as our opinion on subject matter jurisdiction, 494 F. Supp. 1161 (E.D.Pa.1980), which served to introduce the summary judgment motions, more than adequately portray the complexity of the issues and sketch the contours of that other facet of the case's complexity the paper mountain which it has generated. The evidentiary trilogy expands upon that sketch and this opinion, which concentrates upon the record, completes the picture in replete detail. We shall, however, take the time in this Preliminary Statement to describe again, albeit briefly, the parties and the issues.
The plaintiffs in this action are Zenith Radio Corporation ("Zenith") and National Union Electric Corporation ("NUE"). NUE, the corporate successor to Emerson Radio Co., one of the pioneer manufacturers in the radio and television industry, ceased all production of television receivers in February of 1970.
That December it filed the first of these suits,
alleging that the Japanese defendants and others had conspired to take over the American consumer electronic products (CEP) industry
and thereby to drive NUE out of business. In 1974 Zenith filed an action making similar allegations.
The NUE action was then transferred to this district for coordinated or consolidated pretrial proceedings with the Zenith action;
the transfer was later made unconditional and the actions were consolidated for trial.
The ten principal defendants are seven Japanese manufacturers of consumer electronic products (Matsushita Electric Industrial Co., Ltd. ("MEI"); Toshiba Corporation; Hitachi, Ltd.; Sharp Corporation; Sanyo Electric Co., Ltd.; Sony Corporation; and Mitsubishi Electric Corporation ("MELCO"));
a Japanese trading company (Mitsubishi Corporation) ("MC"); and two American companies (Sears, Roebuck & Co. and Motorola, Inc.). Fourteen other defendants are subsidiaries of the principal Japanese defendants. Of the twenty-four defendants, fifteen are defendants in both suits, seven in the Zenith action only, and two in the NUE action only.
The particular offenses charged in the complaints span the range of the antitrust laws. The overall conspiracy is alleged to violate §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2. Plaintiffs also allege actual and attempted monopolization and conspiracy to monopolize under § 2 of the Sherman Act. Additionally, they allege that the defendants have violated § 801 of the Revenue Act of 1916, better known as the 1916 Antidumping Act, 15 U.S.C. § 72, by "commonly and systematically," with predatory intent, selling their products in this country for substantially less than their actual market value or wholesale price in Japan.
The defendants are also charged with violating the Robinson-Patman Act, 15 U.S.C. § 13(a), by discriminating in price among American purchasers.
Finally, Zenith charges that Sears, Motorola, and the Matsushita and Sanyo defendants, along with their coconspirators, violated § 7 of the Clayton Act, 15 U.S.C. § 18, in connection with the Japanese companies' acquisitions of interests in United States consumer electronic products manufacturers.
The plaintiffs' papers seek to portray a massive, continuing unitary worldwide conspiracy said to have lasted over a period of more than twenty years,
the purpose of which is said to be the destruction of the American consumer electronic products industry. Although plaintiffs have embellished this theme with numerous variations, to be described in Part II of this opinion, in general this objective is alleged to have been accomplished by means of a two-pronged "unitary" conspiracy: a (successful) conspiracy to charge artificially high prices to consumers in Japan which funded or "war-chested" a (successful) conspiracy to sell in the U.S. at artificially low prices.
The summary judgment motion which we address herein is but one of many which have been interposed. We have already heard argument on a number of motions addressed to other discrete issues, and have disposed of most of them. We have (1) denied a motion seeking summary judgment for lack of subject matter jurisdiction, see Opinion (Introduction to Summary Judgment Motions; Subject Matter Jurisdiction), Zenith Radio Corp. v. Matsushita Electric Industrial Co., 494 F. Supp. 1161 (E.D.Pa.1980); (2) granted in major part defendants' motion for summary judgment on those claims arising under § 801 of the Revenue Act of 1916, better known as the 1916 Antidumping Act, 15 U.S.C. § 72, see Opinion and Order (1916 Antidumping Act), Zenith Radio Corp. v. Matsushita Electric Industrial Co., 494 F. Supp. 1190 (E.D.Pa.1980), appeal pending, No. 80-2080 (3d Cir.); (3) denied a motion for summary judgment brought by certain defendants against Zenith on the ground that Zenith was not directly injured and was therefore barred from recovery under the doctrine of Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S. Ct. 2061, 52 L. Ed. 2d 707 (1977), see Opinion and Order (Indirect Injury Illinois Brick ), Zenith Radio Corp. v. Matsushita Electric Industrial Co., 494 F. Supp. 1246 (E.D.Pa.1980); (4) denied a motion asserting that NUE lacked standing to sue under the doctrine of Bangor Punta Operations, Inc. v. Bangor & Aroostook R. Co., 417 U.S. 703, 94 S. Ct. 2578, 41 L. Ed. 2d 418 (1974), see Opinion and Order (Antitrust Standing Bangor Punta ), National Union Electric Corp. v. Matsushita Electric Industrial Co., 498 F. Supp. 991 (E.D.Pa.1980); (5) denied a motion by defendant Sears, Roebuck & Co. for summary judgment based on statute of limitation grounds, see Pretrial Order (PTO) 263, Zenith Radio Corp. v. Matsushita Electric Industrial Co., Ltd., M.D.L. No. 189 (May 23, 1980); and (6) denied a motion by Sharp Electronics Corp. alleging that Zenith's claims under the 1916 Antidumping Act are barred by the Treaty of Friendship, Commerce and Navigation between the United States and Japan, 4 U.S.T. 2063, T.I.A.S. No. 2863 (1953), see Memorandum and Order, (1953 Treaty of Friendship Commerce and Navigation with Japan) Zenith Radio Corp. v. Matsushita Electric Industrial Co., 494 F. Supp. 1263 (E.D.Pa.1980).
A summary judgment motion asserting insufficiency of the evidence of monopolization and attempted monopolization against individual defendants under § 2 of the Sherman Act (the so-called "individual monopolization claims") has in major part dissolved. See pages 1318-1319, infra. A motion by Sony Corporation advancing its allegedly unique position as a high price, rather than a low price, seller of television sets was deferred following argument, and will be considered with the other conspiracy motions herein. We have heard argument on a motion asserting insufficiency of the evidence of price discrimination under the Robinson-Patman Act and on motions addressed to the claims under § 7 of the Clayton Act. We will decide these summary judgment issues in this opinion.
The summary judgment motions which we have just described were relatively self-contained. The present motion, on the other hand, implicates an enormous record which may be the largest summary judgment record ever developed. The anatomy of that record will be described in Part III of this opinion. That description will be followed (in Part IV) by a summary of the rulings contained in the evidentiary opinion trilogy. We shall then turn to a discussion of the applicable law, commencing in Part V with the legal standards governing the grant or denial of summary judgment, focusing on the complex case. The major portion of the legal discussion is found in Part VI, in which we engage in a discussion of the legal principles affecting plaintiffs' Sherman § 1 and Wilson Tariff Act conspiracy case. We will begin with a discussion of the law relating to plaintiffs' principal Sherman § 1 allegations, taking up: (1) agreements affecting prices; (2) market allocation; (3) membership in trade associations; (4) exchange of information concerning prices, production and inventory figures, and joint forecasting; (5) product standardization and technical research exchange; (6) secret rebates; and (7) joint activities in promoting public and governmental relations, and joint legal action in response to common problems. This section will be followed by a discussion of statutory standing under sections 4 and 16 of the Clayton Act, and then by a description of the Wilson Tariff Act, which we conclude essentially tracks the Sherman Act in the international trade context.
Another focal point of the legal discussion will be the law of conspiracy in the antitrust context, which will be our next order of business. Our primary emphasis will be upon the legal requisites of circumstantial proof of conspiracy, both in conspiracy cases in general and in antitrust conspiracy cases in particular. We will focus particularly upon the circumstances under which conspiracy can be inferred from parallel business behavior. We shall also consider other aspects of the law of conspiracy with special attention to plaintiffs' admonition against "fragmentation" of their "unitary" conspiracy, their invocation of the "slight evidence" rule, the viability of the doctrine of vicarious liability for the overt acts of coconspirators under the case of Pinkerton v. United States, 328 U.S. 640, 66 S. Ct. 1180, 90 L. Ed. 1489 (1946), and the requisites for admissibility of coconspirator declarations under F.R.E. 104(a) and 801(d)(2)(E).
Having concluded our discussion of the law applicable to plaintiffs' Sherman § 1 claims, we will turn, in Part VII, to a review of the evidence offered in support of plaintiffs' Sherman Act § 1 (and Wilson Tariff Act) case as to television receivers. This is by far the longest segment of the opinion, for the evidence as to television receivers constitutes the overwhelming bulk of plaintiffs' case. That evidence will be described in detail and measured against the applicable law, which we will already have described. During the course of each phase of the discussion, conclusions as to the legal sufficiency of the evidence will be drawn. The evidentiary review will lead us through all of plaintiffs' significant admissible evidence.
In the course of this extensive evidentiary review we shall be concerned not just with plaintiffs' core allegations, but also with their discrete evidence against each of the twenty-four defendants, and we shall make a preliminary determination as to whether there is sufficient evidence of conspiracy to permit the introduction of coconspirator declarations. We will end this evidentiary review with a segment (Part VII.S) summarizing our conclusions as to plaintiffs' Sherman Act § 1 and Wilson Tariff Act case as to television receivers. Although we have some misgivings about a summary of such a detailed opinion, see p. 1299 infra, this section should be a useful reference for anyone who seeks a relatively concise summary of the major grounds of the grant of summary judgment.
In Part VIII we shall summarize plaintiffs' evidence with respect to each of the non-television products (radio, tape, audio, and stereo equipment, and components) about which allegations have been made and shall comment upon the sufficiency of plaintiffs' Sherman Act § 1 and Wilson Tariff Act case in these areas.
Having concluded our treatment of plaintiffs' Sherman Act § 1 (and, a fortiori, Wilson Tariff Act) claims, we shall take up, in Part IX, the applicable case law under § 2 of the Sherman Act and shall apply it to the record so as to assess plaintiffs' conspiracy to monopolize and actual and attempted monopolization claims. In similar fashion, we shall consider the summary judgment motions directed to plaintiffs' Robinson-Patman Act claims (Part X) and Clayton Act § 7 claims (Part XI). We shall conclude the opinion in Part XII with some final observations about plaintiffs' case and about the appropriate forum for the relief they seek.
Having commented preliminarily upon both the size of the record and the breadth of our evidentiary review, a word is in order about our methodology. We have spent months and months in the tedious process of reading in chambers the significant non-background portions of plaintiffs' FPS, reviewing the sources cited for the various allegations contained therein, usually documents contained in the document depository,
and studying the voluminous memoranda addressing the evidence and arguing about its significance, vel non. Because of the plethora of FPS allegations and documents involved, it will not be possible to comment herein on more than a fraction of the materials we have reviewed otherwise this enormously long opinion would have to be much longer. As a result, our conclusions on various points will often take the form of statements that we have reviewed various allegations and documents and find nothing therein which creates a genuine issue of material fact to support plaintiffs' allegations.
We turn first to a description of the anatomy of the plaintiffs' conspiracy claims.
II. The Anatomy of Plaintiffs' Conspiracy Claims
One would expect, after ten years of litigation,
that there would be no difficulty in describing plaintiffs' conspiracy claims. Regrettably that is not true in this case, for plaintiffs' theory of defendants' alleged conspiracy has shifted on numerous occasions during the recent course of this litigation. Indeed, as we shall explain, the most recent shift occurred after the August 1980 summary judgment arguments. Plaintiffs deny that they have altered their theory, and submit that there is a core theory which they have pressed throughout, although they would at least have to admit to having played variations on the theme. We will now attempt to state their core theory and will then explain its meanderings along the way.
Since the charter of plaintiffs' case is their FPS, we look there for a statement of their theory. We find it stated as follows:
In its most basic form, the combination and conspiracy consisted, in part, of a concerted scheme to raise, fix and maintain price lines for consumer electronic products sold by defendants and their co-conspirators in Japan. At the same time, defendants and their co-conspirators conspired and combined to establish and coordinate artificially-low price levels for consumer electronic products exported by them to the United States. The defendants and co-conspirators implemented their combination and conspiracy by exporting to the United States and selling therein their consumer electronic products at these concerted depressed price levels. This concerted scheme was systematically applied to each line and category of consumer electronic products manufactured by plaintiffs.
Defendants and their co-conspirators developed and implemented the combination and conspiracy by meetings and communications among their executives at various levels of management, and through the means of trade association activities participated in and directed by defendants and their co-conspirators. Defendants and their co-conspirators agreed upon prices, rebates, discounts and allowances and other terms and conditions of sale of consumer electronic products, and upon the allocation of customers among themselves. Defendants and their co-conspirators further combined and conspired to restrict, expand and allocate among themselves the absolute volume of production and sale of consumer electronic products and the volume of production and sale of particular products within the lines and categories of consumer electronic products manufactured by them. The defendants and their co-conspirators then did those things which they conspired and combined to do.
The export portion of the conspiracy is said to be composed of two essential elements. The first is the Ministry of International Trade and Industry (MITI)-related export control arrangements or Manufacturers' Agreements, referred to by plaintiffs as "cartel agreements," which were signed by the Japanese manufacturing defendants and a number of other firms and which, inter alia, established minimum or "check" prices on the shipment of various CEP's to the U.S. As an adjunct to these agreements were certain rules of the Japanese Machinery Exporters Association (JMEA), most notably the "Five Company Rule" pursuant to which the Japanese exporter was purportedly limited to five U.S. customers at a time and was required to register his customers with the Association. Plaintiffs contend that these agreements have the intention and effect of affecting prices in the U.S., thus constituting a per se violation of the Sherman Act, and that the Five Company Rule constitutes a customer allocation or "split of product" in further violation thereof.
The second of the twin foci of plaintiffs' export conspiracy case is, mirabile dictu, an agreement by the Japanese defendant exporters and by American importers (including defendants and other alleged coconspirators) to disregard the check prices and to sell their products in the U.S. at lower prices through the vehicle of concealed rebates and discounts. The check price is thus referred to as a "reference" or "benchmark" price, although the plaintiffs never explain how one gets from the reference price to the actual selling price except by asserting that the defendants agreed to sell at "whatever prices were necessary to make the sale."
The concealment was intended both to hide from MITI the fact that the defendants were selling in the U.S. below the check prices and to deceive U.S. Customs as to the actual price. While the higher sales prices reported to Customs resulted in higher customs duty, in plaintiffs' submission defendants thereby avoided imposition of still higher dumping duties. Under plaintiffs' theory the rebate scheme was collusive, in that defendants agreed upon a program of concerted depressed pricing for the purpose of destroying the U.S. CEP industry. The scheme is said to have been aimed at the U.S. private label market and only at American manufacturers. The Japanese defendants are said to have acted as a unit and not to have competed among themselves.
Plaintiffs assert that defendants "dumped" their goods in the U.S., selling at predatory levels and at lower levels than for comparable goods in Japan. They also make allegations of sales below cost. Plaintiffs assert that defendants' practices resulted in the sharp lowering of "pricing points" in the U.S., rendering NUE unable to compete in its lower-price market niche and resulting ultimately in the elimination of numerous U.S. CEP manufacturers and the reduction of profitability levels of the others, including Zenith. Plaintiffs assert that defendants further implemented their scheme and consolidated their gains by the acquisition of a number of U.S. manufacturers and the establishment of manufacturing facilities in the U.S.
1. the export control agreements entered into by the Japanese manufacturers of consumer electronic products;
2. the rules of the Japan Machinery Exporters' Association (JMEA), which implemented the export control agreements and included provisions allocating the U.S. market by restricting each manufacturer to five customers and requiring the registration of trademarks;
3. a number of speeches by high executives of Japanese defendants proclaiming the necessity of stabilizing the Japanese CEP market by cooperative action and evincing a desire to achieve preeminence in export trade with the United States and other countries;
4. the text of the "rationales" of various export control agreements explaining the necessity of stabilizing the export trade;
5. passages in a number of diaries of Japanese officials, in internal company memoranda seized by the Japanese Fair Trade Commission (JFTC), and in some other documents produced in discovery, all of which are said to be probative of agreements to fix prices or to allocate the market, hence of conspiratorial activities of a number of groups and associations to which executives of the Japanese manufacturing defendants belonged. (The allegedly offending groups include the Electronic Industries Association of Japan (EIAJ) and its committees and subdivisions; the JMEA and its committees and subdivisions; the Market Stabilization Council; the Four Associations Conference; the Okura Group; the Palace Group; the Palace Preparatory Group; the Twentieth Day Group; the Tenth Day Group; the MD Group; the TS Group; and the Television Export Council);
6. the mere fact of membership of various defendants in these groups, many of which concededly operated sub rosa;
7. the inference to be drawn from the "sharing" by groups and associations of "every vital piece of information in every phase of the business among the Japanese manufacturers of consumer electronic products";
8. the activities of the defendants in the Japan Light Machinery Information Center (JLMIC) in New York City;
9. the evidence before the JFTC in the "Six Company Case," Case No. 6, 1966, including documentary evidence, affidavits, testimony, admissions by respondents through their counsel, and findings of fact by trial examiners;
10. various schemes by the defendants and their coconspirators fraudulently to conceal their conduct, including secret rebating; false submissions to United States Customs Service; plans to destroy documents, to keep from taking minutes, and to change the names of the conspiratorial groups in Japan; plans to thwart the investigation of the United States Tariff Commission by importers and private label purchasers; and the fraudulent reporting of statistics to the government of Japan;
12. the findings of the United States government, including the dumping findings by the Treasury Department and the finding by the International Trade Commission of injury sustained by U.S. manufacturers of television receivers;
13. the inference to be drawn from the "parallel, interdependent rebating schemes" in which the defendants and their coconspirators participated;
14. the inferences to be drawn from the materials which are said to evidence the knowledge of each defendant of the operation, including rebating practices, of the export systems of each other defendant, and their resulting knowing participation in the rebate scheme;
15. the inferences to be drawn from what is said to be the similar conduct of defendants in selling consumer electronic products in the United States at prices substantially lower than those at which the same merchandise is sold in Japan, and at below cost;
16. the inference to be drawn from the supposed fact that the Japanese defendants' United States subsidiaries similarly and consistently operated at a loss, as reported in their tax returns and financial statements;
17. the sealing off of the Japanese home market from outside competition;
18. the "pattern" of take-overs and acquisitions of U.S. CEP manufacturers by Japanese defendants, including Matsushita's acquisition of Motorola just before Motorola was to begin selling its console color television receivers in Japan;
19. alleged discriminatory pricing by the Japanese manufacturers of consumer electronic products to customers in the United States;
20. the opinion of plaintiffs' experts that defendants constituted a cartel and engaged in both the home market and export facets of the alleged conspiracy; and
21. the notions that it "belies reality" to believe that the defendants, with so much access to each other at trade association and other meetings, did not conspire and that otherwise an American company like Emerson (NUE's predecessor), with such a good name, would not have been driven out of business.
We will, of course review the evidentiary basis for all of these contentions, as well as others made in the FPS and in the briefs, infra. We have attached as Appendix C to this opinion the table of contents to the FPS, which lists all evidentiary areas covered therein.
Having set forth the many facets of plaintiffs' conspiracy theory, we must turn to our analysis of their core allegations, and the metamorphosis thereof, for those are critical matters. Shortly after the assignment of the case to our docket, in search of issue definition, we required counsel (PTO 88) to file detailed statements of their respective positions in the case in the form of preliminary pretrial memoranda (PPTM). In plaintiffs' PPTM, filed in two stages and consuming some 410 pages, and in their contemporaneous comments at pretrial conferences, plaintiffs characterized this as a "simple price-fixing case," with the MITI-related export control arrangements as its "heart," "foundation," and "starting point."
The outer layers of plaintiffs' theory consisted of the allegations referenced above that, through conspiratorial meetings supposedly documented in the diaries and other documents seized by the JFTC (and certain other documents produced in discovery), the Japanese manufacturing defendants had acted in concert to fix prices at a high level in Japan in order to finance or "war chest" the predatory export raid on the U.S. market. Both the PPTM and Plaintiffs' Brief in Reply to the Motion for Summary Judgment of Melco and Melco Sales, Inc., filed October 16, 1978, are dominated by this theory.
There is but scant mention of what later came to dominate plaintiffs' theory of the case the practice by Japanese manufacturers of granting rebates to American purchasers although certain rebate transactions are mentioned.
By the time of the April 1979 summary judgment arguments, plaintiffs' theory had changed. Although the conspiratorial activities of the groups and associations were still stressed, the "rebate scheme" had emerged as a co-equal factor in the conspiracy. But when pressed as to the price or price level or price formula at which the predatory low price conspiracy operated, plaintiffs would say only that defendants sold at "whatever price was necessary to get the sale."
By the time final summary judgment argument arrived in August 1980, emphasis on the rebates had increased while mention of the direct conspiratorial evidence and "war chesting" had decreased markedly. As plaintiffs' lead counsel, Edwin P. Rome, put it:
I suggest that the cartel agreements and the rebate system as a unitary entity constituted a mechanism, the mechanism which enabled the defendants to pursue a course of conduct for depressing prices in the United States, as the result of which, aided by their five-company rule, they were permitted and enabled to concentrate each particular defendant's competitive thrust against a particular mass merchandise customer in the U.S. and thereby deny the capability of an American manufacturer to do business with that customer.
PTO 291 at 128. Under this theory, the export control arrangements and conspiratorial group meetings play an entirely different role from that alleged in the PPTM and brief in reply to Melco's motion. Now, the export control arrangements, instead of being the "heart" of the conspiracy, merely provide a forum through which defendants agreed to a "system" of secret rebates designed to nullify those very same export control arrangements so as to take over the market for sales of television receivers to private label and original equipment manufacturers (OEM) in the United States.
As Mr. Rome explained, the export control arrangements and the existence of secret rebates are now the sole ingredients of the conspiracy claim:
The Court: But be that as it may, I still don't see in terms of conspiracy proof what your theory is except by virtue of the conclusion that you draw as to the inextricable intertwining of the cartel agreements and the rebate system.
Is that what you said? Did you have another ingredient in that?
The Court: The cartel agreements and the rebates.
Under this formulation, the check price becomes a "reference price" or benchmark price. Defendants are said to have sold above, at, and below the check price, but we are never told of the relationship between the check price and the actual price. Perhaps the best description of this theory, which we treat as plaintiffs' principal theory notwithstanding our comments infra, is that plaintiffs charge a conspiracy to sell in the U.S. at depressed or predatory prices. The role of the conspiratorial meetings in Japan, although not abandoned as a basis for plaintiffs' claim, is hardly mentioned.
Plaintiffs do, however, stress certain meetings in the U.S. of counsel for U.S. customers designed to formulate a common strategy to combat U.S. Treasury Department proceedings under the 1921 Antidumping Act. They also stress the alleged knowledge of each defendant and defendants' U.S.-importer customers about the rebate scheme and their alleged knowing participation in it. Little is said at this stage about "war-chesting," apparently because plaintiffs finally recognized that there is no evidence of it in the record.
We were also told by Mr. Rome at the final summary judgment argument that the conspiracy was "protean" (PTO 291 at 115). Perhaps nothing better explains the elusive nature of plaintiffs' conspiracy claims than Mr. Rome's use of the word "protean" to describe them. According to Webster, protean means "capable of change; exceedingly variable ... readily assuming different shapes or forms ... capable of acting many different roles; ... possessed of infinite variety ..." Although the formulation itself undermines the integrity of plaintiffs' claims, its usage was fitting.
Finally, in a post-argument submission in the form of an affidavit by their leading expert, Dr. Horace DePodwin, see Expert Testimony Opinion 505 F. Supp. 1313 at 1334 n.24, plaintiffs seem to revert to their original theory, for there is a clear emphasis upon the check price; the lower (net-net) price after deduction of rebates is said to be involved only in "selective" cases. Whether this reversion is ascribable, on the one hand, to plaintiffs' discovery of a large number of sales at check price (see DePodwin affidavit at 4.9-.10) and the fact that the check price was itself lower than NUE's price (see DePodwin affidavit at 4.11-.12), or, on the other, because the first two opinions in our evidentiary trilogy held inadmissible the critical documents upon which much of plaintiffs' theory of conspiracy as stated in their first two summary judgment briefs rests, we cannot say. We do not dwell upon this theory in the opinion because it is plainly an afterthought, because it is outside the mainstream of plaintiffs' case, and because, in any event there is no evidence that the check price was itself a low price. See discussion infra.
The final facet of plaintiffs' conspiracy theory worth mentioning is a function of their approach to the burden of proof on a summary judgment motion. Plaintiffs have asserted time and again throughout the latter course of the proceedings that evidence of the existence of the alleged conspiracy is to be found in the failure of defendants to file affidavits to explain what went on at numerous meetings which defendants admit occurred and at which plaintiffs allege that conspiratorial activity took place. Indeed, in their final briefs plaintiffs set forth a litany of "critical issues" about which the defendants have been "silent," implying that defendants should have been required to produce information on these subjects even though the plaintiffs deliberately, throughout eight years of discovery, failed to take a single deposition of any individual who attended the allegedly conspiratorial meetings. See discussion at 1200-1202 infra regarding plaintiffs' litigation strategy. For reasons set forth infra, this approach is unavailing.
Because plaintiffs are entitled to the benefit of any theory that will get them past a summary judgment motion, we will consider all the variations on their theme.
Having described the nature and evolution of plaintiffs' conspiracy claims at least as best we can we turn to a description of the summary judgment record. This task will also require us to say something about the role of the more important case management orders we have entered.
III. The FPS, Final Stage Case Management, and the Summary Judgment Record
We have observed that this case is before us on what may be the most ample record for summary judgment purposes ever before a court. The keystone of this record is plaintiffs' roughly 11,500-page FPS, with its roughly 6000-page appendix, which cross-references approximately 250,000 pages of documents. In some respects, the length of the FPS is misleading. First, for reasons of convenience in preparation, plaintiffs limited many pages to a single point covering but 20 to 35 percent of the page. Second, extensive portions of the FPS are devoted to enormously detailed and generally uncontested background material which supplies historical, financial, and personnel-related detail about the various defendants.
Nonetheless, in terms of sheer size and effort of preparation, the FPS is a formidable document. Notwithstanding its domination by damning conclusory statements, which, as we shall see, are generally not substantiated by the referenced supporting documents, the FPS contains a valuable compendium of plaintiffs' allegations and of the critical documents upon which plaintiffs rely, many of them virtually rescribed in the FPS. It also contains important and useful appendices, such as model by model comparisons of T.V. receivers and certain other CEPs, originally ordered in PTO 145.
The FPS, which has won the approbation of both parties as a necessary management tool (for this case), was required by PTO 154, our master case management order, which is reprinted at 478 F. Supp. 889, 946 (E.D.Pa.1979), and which was fashioned in collaboration with counsel.
Paragraph III.C. of PTO 154 orders the parties, both plaintiffs and defendants, to set forth:
each fact that the party intends to prove at trial either affirmatively or by way of defense, together with a list of: (1) the witnesses (including expert witnesses) whose testimony will be advanced to prove that fact; (2) the documents ... which will be offered to prove that fact; and (3) line by line references to any portions of depositions and to answers to interrogatories and requests to admit which will be offered to prove that fact. (footnote omitted).
Pretrial Order 154 continues:
By this formulation we do not intend that the parties must provide a script for trial. We do, however, intend that the parties set forth in narrative form not just the ultimate facts, but all the facts they will prove, including all subsidiary or supporting facts. In so doing they will make, at a minimum, the kind of submission they would make if they were writing detailed requests for findings of fact setting forth what the evidence has established in a non-jury case.... In view of the primacy of the conspiracy claims in plaintiffs' case and defendants' counterclaims, the FPS shall itemize all overt acts to be proved at trial. In particular, the FPS shall enumerate with specificity the facts (i. e. the evidence aliunde) upon which they rely to prove that each defendant ... knowingly joined in the alleged conspiracy and all facts, separately as to each defendant, upon which they rely as to each defendant's participation in the alleged conspiracy. Where any facts will be offered against fewer than all parties, the FPS shall identify the parties against which the facts are or are not offered.
The FPS was required in part as a surrogate for inadequate responses to discovery by the plaintiffs, who had theretofore failed, despite several voluminous waves of interrogatories, including so-called "contention interrogatories" which we authorized for that purpose, to set forth adequately the specifics of their claims. Plaintiffs had never made specific allegations as to how and when this conspiracy was conceived, how it operated, and when and how each defendant became a participant, and had also failed to specify what evidence they had against each defendant. The FPS was designed to fill in these gaps and, under the preclusionary provision of PTO 154, no fact not set forth in the FPS could be adduced at trial except for good cause shown. Thus we now have something cognate to a trial record.
The parties negotiated over the manner of creating the depository and the division of the cost. Because the documents referenced in the FPS were at immediate issue, the plaintiffs assumed the onus of placing the documents in the depository, with the parties dividing the cost. The document depository was "completed" in the Spring of 1980. We surround "completed" with quotation marks because the summary judgment argument and our study of the record in conjunction with the preparation of this opinion have demonstrated that many documents relied upon by plaintiffs are not in the depository and that countless documents have not been translated. The document depository with all its contents is, both for what it contains and for what it does not, an important part of the summary judgment record.
Defendants' also complained, with justification, that the plaintiffs, despite the requirements of PTO 154, had failed to identify in their FPS, discretely as to each defendant, the evidence aliunde which linked it to the conspiracy. We therefore ordered plaintiffs to submit a list of their evidence aliunde, i. e., of the key documents or other materials which constituted independent evidence of the existence of a conspiracy among the defendants. Regrettably, the results of that order were disappointing. Plaintiffs indeed filed an evidence aliunde list, but it consisted of some seven volumes piled over three feet high containing nothing but 250,000 or so numbers the document numbers of virtually all the documents referenced in the FPS. Thus plaintiffs' list of evidence aliunde, intended to inform each defendant with particularity of the evidence against it, did not "advance the ball." Rather, it left the case where it had been for many years, with the plaintiffs invoking a boxcar full of documents as evidence against all defendants on the theory that they were coconspirators, but without any semblance of specificity.
The situation was complicated by the fact that, at least from the beginning of our stewardship in the case, the defendants persistently asserted not only that plaintiffs' documents were inconsequential, but also that the bulk of them were inadmissible in evidence. Melco had formally asserted these evidentiary objections in its Motion for Summary Judgment filed in March 1978.
In sum, despite our fervent and carefully considered case management efforts, which commenced with the PPTM and were codified in PTO 154,
neither the FPS nor the evidence aliunde list was helpful in giving plaintiffs' case the kind of sharp focus necessary for dealing with a motion for summary judgment, because neither of these submissions contained the precise marshalling of the evidence which we had ordered. Rather, each was little more than a carefully organized compendium of virtually every colorably relevant document which had been produced during discovery and copied by the plaintiffs. Moreover, plaintiffs took the position (to which they apparently still adhere) that it is not their burden to detail the evidence in support of their claims, but rather that "the Court must consider the entire FPS in reaching a determination on the issue of conspiracy and in evaluating defendants' Motion for Summary Judgment."
Although we are attempting to do just that, it is fundamental that the Court should not be required to do plaintiffs' job of marshalling the evidence to demonstrate a genuine issue of material fact which would preclude summary judgment.
Rule 56(e) requires that a party opposing a motion for summary judgment must, "by affidavits or as otherwise provided in this rule, ... set forth specific facts showing that there is a genuine issue for trial." (emphasis added).
It also ties summary judgment proceedings to admissible evidence, see note 26, supra. Mindful of those principles, we concluded early in 1980 that in order for us meaningfully to deal with the summary judgment motions, two devices would be especially helpful: (1) a pretrial evidentiary hearing; and (2) a summary judgment argument of sufficient length that plaintiffs would have an opportunity to call to the Court's attention any document in the record which would create a genuine issue of material fact. We proceeded to implement both.
As we have suggested, it was obvious to us by this time that only by examining the actual documents could we assess the viability of plaintiffs' case. Such an examination would enable us to evaluate each document's authenticity and admissibility as well as its efficacy in creating a genuine issue of material fact. The announced charter for the evidentiary hearings was thus to aid in determination of the summary judgment motions. However, prior to their commencement we clearly stated of record that they would also have a second purpose to serve as in limine hearings pursuant to F.R.E. 104(a) so that we could make a pretrial determination whether there was sufficient independent evidence (evidence aliunde) of a conspiracy among the various defendants to permit the introduction of "coconspirator" declarations under F.R.E. 801(d) (2)(E).
See Part VI.D.6, infra. This was an important matter since it was clear to all, and tacitly acknowledged by plaintiffs' counsel, that without the introduction of alleged coconspirators' declarations, plaintiffs might not be able to make out a conspiracy case against most, if not all, of the defendants. Acknowledging that such a charter for hearings might entitle, and indeed require, plaintiffs to put on much of their case-in-chief, or at least the most important parts of it, we placed no time limitation upon the hearings.
The pretrial evidentiary or "in limine" hearings have been fully described in our Public Records Opinion (PTO 283). Suffice it to say that plaintiffs marshalled their key documents, assigning each a DSS (Document Submission Sheet) number,
and argued the admissibility of most of them to the Court. Defendants replied and extensive briefs were submitted by both sides. The hearings resulted in the three lengthy and extremely detailed opinions mentioned above, the results of which will be summarized in Part IV of this opinion. Since the DSS submissions are what plaintiffs have represented to be their most important documents, they are an important part of the summary judgment record.
At the outset of the August 1980 argument on the motions for summary judgment, we informed the parties that our principal concern at that time was not with the legal aspects of the case, but rather with its factual basis. We invited counsel to take as much time as was necessary to go through the entire record and call our attention to any documents, testimony, or other evidence which bore on the existence of a genuine issue of material fact. The defendants accepted our invitation and took over four days to analyze a very large number of the important documents proffered by plaintiffs, arguing that they created no genuine issue of material fact. We found that presentation most helpful. The plaintiffs, on the other hand, declined our invitation and studiously avoided dealing with any specific documentary evidence during their oral argument.
The summary judgment record before us then is a "mixed bag." It includes the preclusive FPS with all its appendices, the documents referenced therein,
and all the DSS's. It also includes all the exhibits offered by plaintiffs in connection with the summary judgment proceedings in April 1979,
and it includes the various affidavits submitted to us by both plaintiffs and defendants and the various appendices thereto, some of which are not contained in the document depository. We shall also consider the voluminous depositions submitted for our consideration, along with the even more voluminous answers of defendants to plaintiffs' interrogatories, the most "visible" of which are those relating to membership in and attendance at meetings of various groups and associations. Additionally, the record includes those portions of plaintiffs' expert reports which we held admissible in our Expert Testimony Opinion.
This description includes a veritable mountain of documents and other materials. However, not all of them have been demonstrated or even asserted to be of any significance on the summary judgment motion. Many of them relate to plaintiffs' damages and are not at issue at this stage; others are purely background material. Countless others, despite inclusion in the FPS, are plainly irrelevant, at least to our determination here. Even after elimination from consideration of those documents, there are many documents, cumulative, marginal, or otherwise, upon which plaintiffs do not seriously rely, notwithstanding their having been referenced in the FPS and placed in the depository. These documents we shall not seriously consider in our evidentiary review.
We do not pretend to have read all 250,000 documents which plaintiffs have referenced in their FPS. We do not think it incumbent upon us to read documents whose importance plaintiffs have not in some way demonstrated. To posit the contrary would make a mockery of the litigation process and render the court hostage to any party who cavalierly sought to bury the court under a mountain of documents in a complex case. Accordingly, our attention will primarily be focused upon the documents (or categories of documents) called to our attention by plaintiffs' (and defendants') counsel in their oral arguments and extensive memoranda. However, we will also consider a considerable number of documents, not specifically relied upon, to which we were referenced by the FPS and which we found arguably germane.
IV. Summary of Pretrial Evidentiary Rulings
For the reasons noted above, the three opinions which arose out of the pretrial evidentiary hearings are incorporated by reference in this opinion. Because of their great length, as a matter of convenience, we summarize herein the ultimate disposition of the major categories of evidence addressed therein.
In the first of those opinions, entitled "Admissibility of Public Records and Reports," Pretrial Order No. 283, 505 F. Supp. 1125 (filed Aug. 7, 1980), 6 Fed.Evid.Rep. 801 (cited herein as Public Records Opinion), we considered the admissibility of a number of public documents proffered principally under F.R.E. 803(8)(C). The first category of documents, promulgated by the U.S. Treasury Department and the U.S. Tariff Commission in connection with proceedings under the 1921 Antidumping Act, 19 U.S.C. § 160 et seq. (repealed 1980), included: (1) Treasury Department Determination of Sales at Less than Fair Value, 35 F.R. 18549 (1970); (2) Determination of Injury by the U.S. Tariff Commission Investigation No. AA1921-66 (undated); (3) The Treasury Department Finding of Dumping, 36 F.R. 4597 (1971); and (4) numerous Customs Forms 29's, appraising dumping duties against various defendants and other importers. The thrust of these documents as proffered by the plaintiffs was that: (1) television receivers from Japan were being sold in the United States at less than fair value; (2) an industry in the United States was being injured by reason of such sales; (3) dumping had thus occurred in violation of the 1921 Antidumping Act; and (4) dumping duties had been assessed against specific importers (on the Customs Form 29). The time frames of these documents are within the frame of reference of plaintiffs' claims. However, all of these documents were excluded: (1) as hearsay and not admissible under the relevant exception to the hearsay rule (F.R.E. 803(8)(C)); (2) as irrelevant to the present case; and (3) as at all events excludable under F.R.E. 403 on the grounds that any minimal probative value the documents may have had was far outweighed by the danger of unfair prejudice, confusion of the issues, and misleading the jury, and by considerations of undue delay, waste of time, and needless presentation of cumulative evidence.
The second category of evidence addressed in the Public Records Opinion was composed of documents, including certain findings, promulgated by the U.S. Tariff Commission and its successor, the U.S. International Trade Commission (I.T.C.), and by the Secretaries of Labor and Commerce under §§ 301(b)(1) and (c)(1) and (2) of the Trade Expansion Act of 1962 and §§ 201(b) and 221 of the Trade Act of 1974. These documents contained various findings of injury to United States industry. All of the documents were excluded as hearsay, as irrelevant, and under F.R.E. 403.
Third, the Public Records Opinion dealt with certain purported findings and related documents arising out of proceedings in two cases before the Japanese Fair Trade Commission (JFTC). The first was a 1957 case brought against the Home Electric Appliance Market Stabilization Council, some of whose members are defendants in this action, alleging industry-wide price fixing. The second case, brought in 1967, alleged retail price maintenance against defendant MEI. In plaintiffs' submission, these materials are probative of the role of various defendants in the alleged home market aspects of the "unitary" conspiracy. However, all of them were excluded as hearsay and inadmissible under the 803(8) (C) exception to the hearsay rule. Moreover, certain "decisions" of the JFTC were also excluded as inadmissible under F.R.E. 408 and 410.
Plaintiffs also sought admission under F.R.E. 803(8)(C) of the findings of Judge A. Leon Higginbotham, Jr., our predecessor in this case, found at 402 F. Supp. 262 (E.D.Pa.1975), regarding personal jurisdiction and venue. However, we held that Judge Higginbotham's findings did not come within the ambit of Rule 803(8)(C) and that they were therefore inadmissible.
Finally, we dealt in the Public Records Opinion with certain statistical data from the statistical office of the United Nations and a report of the Organization for Economic Cooperation and Development. We found this data, which is in part technological (relating to electronic components) and in part statistical (relating to television production figures of various countries), to be admissible.
The second opinion in our evidentiary trilogy was entitled Admissibility of Materials Relating to Activities in Japan, PTO 295, 505 F. Supp. 1190 (filed September 29, 1980), 6 Fed.Evid.Rep. 1329 (cited herein as Japanese Materials Evidentiary Opinion). That opinion dealt with the admissibility of three major groups of documents: (1) materials seized by the JFTC in "raids" on the offices of several of the defendants here who were respondents in the Six Company Case; (2) testimony and statements or "protocols" given by officials of the respondent companies during the course of the JFTC proceedings in the Six Company Case; and (3) materials produced in discovery from the files of the Japanese defendants and others relating to activities in Japan of Japanese manufacturers of consumer electronic products or of associations of manufacturers. Our rulings were all predicated on either Article VIII (hearsay) or Article IX (authentication) of the Federal Rules of Evidence.
We first dealt with the diaries or notebooks of officials of several of the Japanese defendants, which were said to contain evidence of the alleged conspiracy.
We next considered the admissibility of a number of internal memoranda of certain of the defendants,
minutes of certain EIAJ officers' meetings, supposed minutes of the TV Export Council meetings, and the so-called Japan Victor document, allegedly emanating from the EIAJ Statistics Committee. We held all of these documents to be hearsay and inadmissible under any of the exceptions to the hearsay rule. As we have noted, we also considered the admissibility of the formal testimony of executives of the Japanese companies before the JFTC, as well as of the protocols given by them to the JFTC investigators. We held the JFTC testimony admissible against the defendants in the "Six-Company Case" only, except for any so-called "export" or "war-chesting" references, which we held with minor exceptions to be inadmissible. We held that the protocols were admissible against the employer of the maker of the protocol only.
In the third opinion in our evidentiary trilogy, entitled Admissibility of Expert Testimony, PTO 301, 505 F. Supp. 1313 (filed December 10, 1980) (cited herein as Expert Testimony Opinion) we considered the admissibility of the opinions of five of the plaintiffs' expert witnesses, as set forth in compendious reports prepared by those experts. The reports at issue were: (1) "Economic Study of the Japanese Television Industry," by Dr. Horace J. DePodwin, Dr. David Schwartzman, and Marcio Teixeira of Horace J. DePodwin Associates, Inc., an economic consulting firm (the DePodwin Report); (2) "The Pervasive Use of Collusive and Company Group (Keiretsu) Activities in Achieving the Rapid Increase of Japanese Exports of Television Receivers to the United States," by Professor Kozo Yamamura, Chairman, Japan Studies Program and Professor of Economics and East Asian Studies at the University of Washington (the Yamamura Report); (3) "Economic Analysis of Evidence Relating to Japanese Electronic Products Antitrust Litigation," by Stanley Nehmer of Economic Consulting Services, Inc. (the Nehmer Report); (4) "The Impact of Japanese Financial and Employment Practices on Japanese Production, Marketing, and Price Behavior," by Professor Gary R. Saxonhouse, Professor of Economics, University of Michigan (the Saxonhouse Report); and (5) "Vertical Restraint by Japanese Television Manufacturers: Anticompetitive Effects," by Professor John Owen Haley, Associate Professor of Law at the University of Washington (the Haley Report).
We did not undertake to rule upon the admissibility of these experts' reports qua reports nor upon the admissibility of all of the opinions expressed in their reports. Rather, we culled from the reports the salient opinions of the experts with possible bearing upon the outcome of the motions for summary judgment. In terms of methodology, each of the experts had reviewed the documentary materials provided him by plaintiffs' counsel, drawn upon his economic knowledge, and then in essence concluded that defendants were engaged in precisely the conspiracy posited by plaintiffs.
In our Expert Testimony Opinion, we excluded the great bulk of these expert opinions, holding admissible only background materials relating to the structure of the Japanese market, including its trade barriers, the technological development of the consumer electronic products industry, and basic economic principles and methodology.
We reserved our ruling on one calculation of price differentials between the Japanese and American market presented in Part V of the DePodwin Report. See Expert Testimony Opinion 505 F. Supp. 1313 at 1348. Most of the remaining material is attacked by defendants on relevancy grounds, and is discussed in the pertinent sections, infra.
Our Expert Testimony Opinion was two-pronged. To summarize, we first found that most of the experts' crucial opinions, notably those which concluded that defendants in this action were acting collusively, were so pervaded by reliance upon untrustworthy materials, including materials excluded from evidence in our two previous evidentiary opinions, as to render them inadmissible under F.R.E. 703. In addition, we concluded that the experts, by providing a narrative factual description and summary of the evidence before the court, and drawing (factual) conclusions upon which they in turn founded their opinions, were not utilizing any expertise in a manner helpful to the jury under F.R.E. 702, but were instead acting not as economists but as conspiracyologists engaged in inadmissible "oath-helping."
Our discussion at this juncture of the numerous documents and opinions which we have excluded from evidence is important because of the necessity for perspective. First, the excluded evidence includes the most important documents in plaintiffs' original submissions and, in a very real sense, an evaluation of the plaintiffs' case is aided by an understanding of the extent to which its original integral parts are now missing. Second, because of the importance of the excluded documents, we may have occasion from time to time to observe whether the outcome would have been different had the documents not been excluded. Third, the reason for the exclusion in the Japanese Materials Evidentiary Opinion of the most critical of these documents lack of foundation reflects upon the integrity of plaintiffs' conspiracy case, a subject upon which we will comment further infra.
Perhaps the most graphic description of the impact on plaintiffs' case of our trilogy of evidentiary opinions comes from analysis of a portion of Plaintiffs' Memorandum in Reply to the Motions for Summary Judgment of Certain Defendants,
Matsushita Defendants, and Sears, Roebuck & Co. (filed April 2, 1979), 8 1/2 years after the filing of the NUE action. In Part III.B. of that memorandum the plaintiffs purported to review the evidence of the overall combination and conspiracy, advancing the view that the defendants had completely failed to rebut plaintiffs' evidence. The major categories of evidence which plaintiffs advanced at that time were:
1. Data on the early development of the Japanese electronics industry;
2. Matsushita-Philips' agreements creating Matsushita Electronics Corporation for the production, sale, and exportation of electronic components;
3. The formation of the defendants' trade associations, including the EIAJ and JMEA;
4. Excerpts from publications of the JMEA in its "Association News" and from the EIAJ's publication "Denshi";
5. The admission that there were meetings of the Chairmen of the Board and other officials of the defendant companies (the so-called conspiratorial groups), coupled with the evidence from the "Six-Company Case" ; and
Yet, the evidence from the Market Stabilization Council and from the "Six-Company Case" which includes the vast bulk of the evidence about the conspiratorial groups and all the "export references," have been excluded from evidence by our trilogy of evidentiary opinions.
We consider in this opinion such admissible or significant evidence as is left from plaintiffs' presentation.52A The short of it, however, is that the evidentiary rulings we have just described have not just narrowed markedly the scope of the viable record before us, but have virtually emasculated plaintiffs' case.
We turn now to an explication of the legal principles which will govern our analysis of those portions of plaintiffs' case that remain.
V. Standards Governing Summary Judgment
The parties, principally the plaintiffs, have devoted extensive portions of their briefs to descriptions of the law governing the grant or denial of summary judgment. For example, the plaintiffs, in their August 11, 1980, brief in opposition to defendants' summary judgment motion devoted eighteen pages to the point. The thrust of plaintiffs' argument is that summary judgment has almost never been granted in complex antitrust cases where "state of mind" is an issue. We explain herein the principles in this area that we will apply.
The general principles governing the grant or denial of summary judgment are well known. We set forth those principles, at least as they have been announced in the Third Circuit, in our Opinion and Order (1916 Antidumping Act), 494 F. Supp. 1190, 1239-40 (E.D.Pa.1980):
Rule 56 of the Federal Rules of Civil Procedure permits the grant of summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." F.R.Civ.P. 56(c). The burden of demonstrating that there is no genuine issue of material fact rests on the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970). Summary judgment may not be granted if there is "the slightest doubt" about material facts. Tomalewski v. State Farm Life Insurance Co., 494 F.2d 882, 884 (3d Cir. 1974). Consequently, a motion for summary judgment may not be granted on the ground that if a verdict were rendered for the adverse party the court would set it aside as against the weight of the evidence. Perks v. Firestone Tire & Rubber Co., 611 F.2d 1363, 1366 (3d Cir. 1979), quoting Rosenthal v. Rizzo, 555 F.2d 390, 394 (3d Cir.) cert. denied, 434 U.S. 892, 98 S. Ct. 268, 54 L. Ed. 2d 178 (1977). Similarly, summary judgment is not appropriate if the resolution of a material issue of fact turns on the credibility of witnesses. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S. Ct. 486, 491, 7 L. Ed. 2d 458 (1962); Remak v. Quinn, 611 F.2d 36 (3d Cir. 1979). All inferences from the evidence must be drawn in favor of the party opposing the motions here, the plaintiffs. Small v. Seldows Stationery, 617 F.2d 992 (3d Cir. 1980).
In support of their position, plaintiffs rely mainly upon the famous decision in Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S. Ct. 486, 7 L. Ed. 2d 458 (1962), in which the court stated:
We believe that summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot.... Trial by affidavit is no substitute for trial by jury.
368 U.S. at 473, 82 S. Ct. at 491 (footnote omitted). While Poller has never been overruled, the gloss that plaintiffs place upon it has been significantly dulled in recent years. The number of antitrust cases in which the Supreme Court and courts in the Third Circuit have granted or upheld the grant of summary judgment on the merits, either partial or complete, since the Poller decision in 1962 is extremely large.
It is now settled that summary judgment is appropriate in those antitrust cases where plaintiffs, after having engaged in extensive discovery, fail to produce "significant probative evidence" in support of the allegations in their complaint. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289-90, 88 S. Ct. 1575, 1593, 20 L. Ed. 2d 569 (1968). The Cities Service Court stated:
391 U.S. at 291, 88 S. Ct. at 1593. See also Mid-West Paper Products Co. v. Continental Group, Inc., 596 F.2d 573, 579 (3d Cir. 1979).
The most recent case in this area is Pan-Islamic Trade Corp. v. Exxon Corp., 632 F.2d 539 (5th Cir. 1980), where the plaintiff relied heavily upon Poller to argue that summary judgment may not be granted in a complicated antitrust case. After discussing the Supreme Court's holding in Poller and ascribing to Cities Service a significance equal thereto, the court proceeded to affirm the grant of summary judgment, noting:
It is clear that this circuit has heeded the language in Cities Service. When faced with defendants' sworn denial of the existence of a conspiracy, it is incumbent upon the plaintiff to produce significant probative evidence demonstrating that a genuine issue of fact exists as to this element of the complaint.
Id. at 554. We perceive the Third Circuit to be in accord.
The interpretation which these and other antitrust plaintiffs have attempted to give to Poller was criticized by the National Commission for the Review of Antitrust Laws and Procedures in its Report to the President and the Attorney General dated January 22, 1979, 80 F.R.D. 509, 566-67:
Rule 56 of the Federal Rules of Civil Procedure and the accompanying Advisory Committee notes indicate a uniform summary judgment standard for all cases and no special category for antitrust or other complex actions. Some courts, however, have been much more reluctant to grant summary judgment in antitrust cases. This result, in our opinion, stems from overly restrictive interpretation of certain Supreme Court cases.... This language (quoted supra at 1139-1140) may have served at the time to correct overly eager use of summary judgment in some antitrust cases, and the Commission is not recommending a return to pre-Poller practice. Some cases since Poller, however, appear to have gone to the opposite extreme.
Under Poller and other Supreme Court decisions, failure by the movant to disprove conclusively a disputed material fact or factual inference requires denial of a motion for summary judgment. This formulation has led to overly strict application in some instances. Some appellate courts have stated, for example, that summary judgment should not be granted if there is the "slightest doubt" as to any material fact. This is an unwarranted gloss on the "genuine issue" requirement. Opinions relying on the slightest doubt standard have been declining, however, and some circuits, including the Second Circuit, have explicitly rejected the more restrictive language found in older cases.
Since we view the present language of Rule 56 as compatible with more effective use of summary adjudication, we do not recommend a change in the Rule. If, however, future decisions do not enhance the availability of summary judgment, an amendment to the Rule may be needed.
Summary judgment has, as one of its most important goals, the elimination of waste of the time and resources of both litigants and the courts in cases where a trial would be a useless formality. Courts must, of course, proceed with caution in determining litigation by summary judgment; this is especially true where grave, important and novel questions of law are involved. However, the mere fact that the issues may be complex is not a valid reason to deny summary judgment when there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.
(emphasis added). We agree.
Against this background, the courts have repeatedly held that when, despite adequate discovery, plaintiffs cannot come forward with admissible and probative evidence of an antitrust violation, summary judgment is appropriate. See, e.g., Comet Mechanical Contractors, Inc. v. E.A. Cowen Construction Inc., 609 F.2d 404 (10th Cir. 1980); Modern Home Institute, Inc. v. Hartford Accident & Indemnity Co., 513 F.2d 102, 109-10 (2d Cir. 1975); Consolidated Farmers Mutual Insurance Co. v. Anchor Savings Ass'n, 480 F. Supp. 640 (D.Kan.1979), aff'd, 1980 Trade Cases P 63,530 (10th Cir. 1980), cert. den., 449 U.S. 1080, 101 S. Ct. 863, 66 L. Ed. 2d 804; Raitport v. General Motors Corp., 450 F. Supp. 1349, 1355 (E.D.Pa.1978) (summary judgment granted where plaintiff had "more than ample opportunity to conduct discovery" and yet "offered only unsubstantiated conspiratorial allegations in support of his claims"); Merit Motors, Inc. v. Chrysler Corp., 417 F. Supp. 263 (D.D.C.1976), aff'd, 187 U.S. App. D.C. 11, 569 F.2d 666 (D.C.Cir.1977); Chuy v. Philadelphia Eagles, 407 F. Supp. 717, 721-22 (E.D.Pa.1976) (summary judgment granted where plaintiff had three years of discovery and "ample opportunity to cross-examine hostile witnesses," but had "turned nothing up"). Indeed,
(w)hen it becomes plain that the allegedly unlawful acts do not exist, and the plaintiffs' claims are without merit, the Court has a duty to grant summary judgment.
Natrona Service, Inc. v. Continental Oil Co., 435 F. Supp. 99, 106 (D.Wyo.1977), aff'd, 598 F.2d 1294 (10th Cir. 1979) (emphasis added); Capital Temporaries, Inc. v. Olsten Corp., 365 F. Supp. 888 (D.Conn.1973), aff'd, 506 F.2d 658 (2d Cir. 1974).
As we have noted, to avoid summary judgment, plaintiffs must advance "significant probative evidence" as to each of the elements of the antitrust conspiracy claim. First National Bank of Arizona v. Cities Service Co., supra. In order to be probative, the evidence must at least be admissible. See n. 3, supra. Moreover, the term "significant probative evidence" excludes speculation. Where speculative evidence is the only support for plaintiffs' claims, courts have not hesitated to grant summary judgment. In Robin Construction Co. v. United States, 345 F.2d 610, 614 (3d Cir. 1965), the Third Circuit upheld the grant of summary judgment where the plaintiff had nothing to offer but speculation and possibilities:
Similarly, in Bolt Associates, Inc. v. Alpine Geophysical Associates, Inc., 365 F.2d 742, 747 n.4 (3d Cir. 1966), the Third Circuit, citing Robin Construction, stated that "counsel's speculations are not sufficient to resist a motion for summary judgment." And in British Airways Board v. Boeing Co., 585 F.2d 946, 952 (9th Cir. 1978), cert. denied, 440 U.S. 981, 99 S. Ct. 1790, 60 L. Ed. 2d 241 (1979), the court stated that:
(a) party opposing a motion for summary judgment must introduce "sufficient evidence supporting the claimed factual dispute ... to require a jury or judge to resolve the parties' differing version of the truth at trial." First National Bank v. Cities Service Co., supra, 391 U.S. at 288-289, 88 S. Ct. at 1592... A mere scintilla of evidence will not do, for a jury is permitted to draw only those inferences of which the evidence is reasonably susceptible; it may not resort to speculation.
Turning to the question of burden of proof, the law is clear that it is the burden of the moving party (in this case the defendants) to show that there is no genuine issue of material fact. On the other hand, it is clear from Cities Service that the burden of demonstrating that there is significant probative evidence is on the party opposing the motion, in this case the plaintiffs. Plaintiffs cannot attempt to shift that burden by the spurious claim that the defendants must show a lack of significant probative evidence. As will be seen, this is a case in which, despite more than adequate discovery close to a decade's ...