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May 13, 1981


The opinion of the court was delivered by: BECKER

[EDITOR'S NOTE: Part 2 of 3]



 G. Activities of Certain Groups and Associations in Japan

 1. Introduction; General Background

 Plaintiffs' case as it relates to activities in Japan has its primary roots in the membership of the Japanese manufacturing defendants in a large number of conventional trade associations (and in sub-committees thereof) and in a number of additional trade groups operating sub rosa. Plaintiffs have identified these groups in the 500-page Appendix A to their FPS, entitled "Plaintiffs' Compilation of Japanese Trade Associations and Other Groups." In this appendix, plaintiffs also identify the individuals who attended the meetings of the various groups, the company employing that individual, and the source of information as to membership. Appendix B, consisting of four volumes entitled "Calendar of Conspiratorial Meetings," sets forth the dates of these meetings. *fn125" As the title of the Appendix suggests, it is a fair statement that, in plaintiffs' submission, no meeting ever occurred among the executives of the defendants which was not "conspiratorial."

 We will address four basic groups or congeries of groups. The most important to plaintiffs' case is a host of informal sub rosa groups (the Okura, Palace, and Tenth Day Groups, et alia), whose existence was revealed by the JFTC investigation in the "Six Company Case" and whose membership was composed of executives of the Japanese manufacturing defendants. The purpose of these groups, in plaintiffs' submission, was darkly conspiratorial. The second and largest category consists of the Electronic Industries' Association of Japan (EIAJ), a trade association, and its multitudinous committees and sub-committees. The third category contains the JMEA and its various committees, which were involved in the export control scheme implemented in conjunction with MITI. Finally, we will address the Home Electric Appliance Market Stabilization Council and a supposedly related group, the Four Associations Conference. These groups are alleged to have been involved in a Japanese home market price fixing conspiracy in the late 1950's.

  We have organized this segment of the opinion according to these four categories of groups, further dividing the sub rosa groups according to whether the activities under discussion relate to the home market or export aspects of the "unitary" conspiracy. We are not entirely happy with this mode of organization because there is considerable overlap in the activities of the various groups, especially with respect to certain kinds of data dissemination. Nonetheless, we believe that the record before us can be described more fully and with greater clarity by organizing our discussion around the four categories of groups and associations than by utilizing an issue or subject matter approach with annotations to the relevant groups sprinkled amidst a cross-sectional discussion. However, to avoid redundancy in the information exchange area, we make an exception to this format with respect to data dissemination concerning price, production, shipment, and inventory, and joint forecasts of demand. We shall discuss all of plaintiffs' evidence in this area at the time that we discuss this type of data exchange by the sub rosa groups.

 The Japanese manufacturing defendants do not dispute either the existence of or their membership in any of these groups, and assert that the fact of membership alone is not evidence of the conspiracy which plaintiffs have pleaded. That proposition is, as we have seen in Part VI.A.4, supra, quite correct, and to the extent that plaintiffs have offered evidence of no more than mere membership, their case in this area must fall. Recognizing this fact, plaintiffs have attempted to supply evidence about the activities of the various groups through documents seized by the JFTC in the "Six Company Case" and by other documents produced in discovery. As we have observed, plaintiffs have been unable to procure direct evidence of conspiracy, and have therefore been relegated to establishing it by circumstantial means. Hence, the documents are of critical importance. *fn126"

 It is the documents that have been the principal object of our attention over the past months. As will be seen, however, they are not necessarily pellucid or self-explanatory. As will also be seen, because plaintiffs have adhered to a litigation strategy of refusing to take depositions of persons who might clarify these often cryptic or opaque documents, see discussion at pp. 1200-1202 infra, we have generally been left to interpret the documents in a vacuum. Although we shall, as we must, give the plaintiffs the benefit of all favorable inferences in analyzing the documents, they may have to suffer the consequences of their litigation strategy.

 2. The Sub Rosa "Conspiratorial" Meetings of Executives Revealed by The Six Company Case

 (a) Introduction; General Background

 The groups and associations most important to plaintiffs' case are those whose existence was revealed by the seizure of certain documents from the offices of the Japanese manufacturing defendants during the course of the investigation in the Six Company Case brought by the JFTC in 1966. *fn127" The documents included diaries or notebooks of officials of the Japanese companies and also certain internal company memoranda, all of which revealed the existence of regular sub rosa meetings of executives of the various companies. It is plaintiffs' submission that during the course of these meetings the defendants jointly discussed and entered into agreements upon price levels for television receivers to be sold in Japan, as well as to be exported to the United States, and that the executives agreed upon production and allocation of production as well as other matters, all in furtherance of a conspiracy to fix high prices in Japan to finance or "war-chest" a predatory export raid designed to destroy the United States CEP industry. The catalogue of allegedly conspiratorial groups is as follows.

 Plaintiffs describe the Okura Group as a regular monthly meeting of the highest executives of the Japanese CEP manufacturing defendants at the Okura Hotel in Tokyo. They are said to have met from as early as 1964 through at least September 1974. The Palace Group is said to have met at the Palace Hotel in Tokyo from 1964 until at least September 1974. The Palace Group was composed of senior managing directors, who are high-level executives just below the chief executive level. The Palace Preparatory Group is said to have been an assemblage of persons whose job it was to digest the matters discussed at meetings of the Tenth Day Group, see infra, and to segregate those matters relating to the price-fixing activities of the Tenth Day Group and those issues not decided by the Tenth Day Group and to prepare an agenda of the more important unresolved matters to be taken up by the Palace Group.

 The Tenth Day Group, said to have been so named because its first meeting occurred on September 10, 1964, was attended by mid-level corporate managers involved in the day-to-day operation of the various divisions of the Japanese CEP manufacturers. In plaintiffs' submission, the Tenth Day Group was the real hub of the price-fixing conspiracy. More specifically, plaintiffs assert that at Tenth Day Group meetings, defendants' representatives secretly discussed and agreed upon: (1) the minimum price level for monochrome and color television receivers manufactured and sold by them in Japan; (2) the profit margins (in percentages) to be realized by retail dealers on sales of defendants' television receivers; (3) the profit margins to be realized by wholesalers on the sale of defendants' television receivers; (4) (indirectly) the manufacturers' shipment prices on television receivers manufactured and sold in Japan; (5) the relationship between the prices of television receivers manufactured by them and sold in Japan and the prices of television receivers manufactured by them and sold in the United States; and (6) prospective shipment and production figures. With respect to this last point, plaintiffs submit that defendants exchanged a variety of internal corporate information regarding immediate past records of production and shipment, exchanged corporate estimations of future demand for television receivers to be sold in Japan and to be exported, and also "voted" on projected production. Although the defendants have asserted that the Tenth Day Group was dissolved in 1966, plaintiffs contend that it continued until at least 1973.

 The TS Group is said to have been a conspiratorial group which was attended by several smaller Japanese CEP manufacturers as well as by the larger manufacturers. It is said to have engaged in discussion of and agreement on the prices of television receivers to be sold in Japan, including installation fees and service charges, the nature of warranties to be furnished, the common advertising approach to be taken to certain products, etc. Although the TS Group was originally related to TV service, the character of the meetings is said ultimately to have changed so that the group talked about the same issues as the Tenth Day Group and used essentially the same procedures.

 The Twentieth Day (or Hibiya) Group is said to have been formed at least as early as 1960 as a "secret forum for discussion of, and agreement upon, the export prices of television receivers." Plaintiffs allege that among the matters considered by the defendants at the Twentieth Day Group meetings were the prices of TV receivers exported to the United States. The plaintiffs also submit that through the Tenth Day and the Twentieth Day Groups, the "cartel" coordinated the relationship between TV export prices and domestic TV prices. The Twentieth Day Group is said to have met at least through November 1972.

 The last group claimed by the plaintiffs to have been involved in secret conspiratorial activity is the MD Group, which plaintiffs say was a forum for secretly exchanging the most sensitive intra-corporate material, such as actual and projected production, shipment, and inventory figures. The MD Group members are also said to have voted on each company's projected production, providing a vehicle, in plaintiffs' submission, for adjusting production in conjunction with one another. *fn128"

 In the appendices to the FPS which we have described, the plaintiffs have elaborately set forth the membership and the dates of meetings of each of these groups. In the FPS, plaintiffs have stressed the overlapping membership of the groups and have pointed to the commonality of membership of these groups and the various EIAJ committees, and also of the JMEA and its committees, whose members were signatories to what plaintiffs contend were export cartel agreements.

 Beyond such background matters as membership and dates of meetings, the plaintiffs have devoted hundreds upon hundreds of pages of their FPS to a putative description of the activities of these sub rosa groups. As is so often the case, plaintiffs' FPS contains conclusory statements about what the evidence shows without support in the evidence itself. In the case of evidence of the activities of the various "conspiratorial groups," the evidence is derived almost entirely from the JFTC record in the Six Company Case and various answers by the defendants to "Interrogatories Relating to Japanese Trade Associations and Other Groups."

 The answers to interrogatories concede that the various groups existed as alleged and that representatives of the various defendants attended meetings of the groups. The defendants also concede multiple group membership and that the same individual often attended meetings of a number of different groups. However, that is where the agreement between the parties ends. The defendants submit that the plaintiffs' conclusions as to what went on in the various group meetings is totally at odds with the facts. They also submit that plaintiffs have taken great liberties with the documents which they have referenced in the FPS by asserting that they support plaintiffs' conclusory allegations of conspiratorial activity. That this latter contention is correct is clear beyond cavil.

 Many of the documents here at issue are those dealt with at length in the Japanese Materials Evidentiary Opinion, which we have summarized in Part IV, supra, and which we have incorporated by reference herein. In that opinion, we excluded virtually all of the materials which can be claimed to constitute direct evidence of plaintiffs' broad conspiratorial allegations, including their "smoking guns," on the grounds that they were unauthenticated or were hearsay and not within any of the exceptions to the hearsay rules. It is important to note that the documents upon which the plaintiffs have most heavily relied those that are the most critical to their case were excluded not on some technical ground, but because they were found to be untrustworthy.

 The most significant of those documents, the diaries and internal memoranda, all appear to have been written solely for the author, with the notations written in a kind of shorthand code which the writer presumably could understand but which, except for occasional excerpts, is unintelligible to others. We explained in the Japanese Materials Evidentiary Opinion:


As defendants correctly note, they (the diaries) are a "hodge podge" of notes in which the author has not explained with any degree of clarity what he meant, to what he was referring, or even where he was when he wrote it. While plaintiffs have clarified a few of the references in the diaries by cross reference to JFTC testimony or protocols, only an infinitesimal part has been thus explained. One would have to engage in the rankest of speculation to make sense out of the vast bulk of the diaries.


One cannot tell with any certainty where entries begin and end. There are many time gaps in the notebooks or diaries, and only a portion of the "conspiratorial meetings" otherwise demonstrated to have taken place are recorded in them. There are all kinds of arrows and innumerable symbols and notations and references which are unintelligible to the translators, who report those references as "illegible." Many of them are written in a code which only a cryptographer could solve.


There is both intrinsic and extrinsic evidence that many of the diary entries reflect occurrences at meetings which the diarists did not attend, but rather about which they were informed by others. The diaries plainly contain numerous instances of second and third level hearsay. Because of the manner in which the diaries are kept, however, it is not possible to sort out which entries are based upon the diarist's personal knowledge and which are based upon hearsay. There is no evidence of regular or continuous habit on the part of any of the diarists in making their notebook entries or checking them systematically.

 505 F. Supp. 1190 at 1212. These observations are documented at length in that opinion.

 Our exclusion of these documents was in large part a function of the failure of the plaintiffs to lay any foundation for them by the testimony of someone who could explain what they meant. Notwithstanding that fact, what the plaintiffs have done (or at least have attempted to do) in the FPS is to interpret the documents according to their own view of the case, that interpretation being the nexus between the raw excerpts from the document, or what we call the "bits and pieces," and the conclusory statement in the FPS. Plaintiffs cannot, of course, advance their interpretations on the basis of documents we have excluded as the result of pretrial evidentiary hearings (except to the extent that they succeed in challenging our rulings on appeal). However, a number of documents similar in character to those excluded in the Japanese Materials Evidentiary Opinion but not submitted for consideration during the evidentiary hearings must be taken up herein because they appear at important points in the FPS. *fn129" Since these documents too are unexplained by any witness, it is necessary that we rescribe what we said in the Japanese Materials Evidentiary Opinion on the subject of plaintiffs' litigation strategy.

 Taking the diaries as an example of that litigation strategy, it is obvious that there are indeed persons who could eliminate the difficulty we have described and decipher any code-like references: the diarists themselves. In their absence, someone present at the meetings whose proceedings are supposedly recorded, or someone contemporaneously familiar with the contents of the diary or memo and the diarist's recording practices could serve. However, the plaintiffs, despite their role as proponents of the documents, hence bearers of the burden to qualify them, have not proffered the testimony in any form of any such person. Moreover, they have made it clear that they have no intention of doing so, before or at trial. *fn130" Rather, they have attempted to qualify the documents circumstantially and to offer selected (though extensive) excerpts therefrom.

 The litigation strategy we have described is not merely our supposition. Edwin P. Rome, Esquire, plaintiffs' lead counsel, has confirmed the strategy time and again. For example, he noted during the course of the evidentiary hearings:


I assume personally, Your Honor, whatever onus there may be about the fact that we chose quite deliberately, and I state it of record, we chose quite deliberately not to undertake to depose persons in a foreign language when we had documents that in our view documented and explicated a conspiracy to violate American law.

 PTO 268 at 143-44 (June 27, 1980). There are numerous similar statements by Mr. Rome in the voluminous record. *fn131" This litigation strategy was maintained in the face of repeated warning from the defendants that they intended to challenge the admissibility of the diaries, memoranda, protocols, and testimony. *fn132"

 Indeed, we challenged plaintiffs on several occasions, questioning why, having proceeded with this case for close to a decade and having inspected literally millions of documents, they had failed to take depositions to lay foundation for the admissibility of the seriously challenged JFTC materials. We also sharply questioned plaintiffs as to why, given the magnitude of their claims and the existence of so much fodder for examination, they had failed to take depositions, for substantive purposes, of a single Japanese executive who attended any of the allegedly conspiratorial meetings at the core of plaintiffs' case. We noted that we found it difficult to conceive of counsel pursuing that strategy in a case with purely U.S. roots, and that it was ordinary fare in complex cases for counsel to take depositions to qualify documents, *fn133" as well as for substantive purposes. Mr. Rome consistently responded that it was his considered decision not to do so.

 That foundational and substantive depositions of Japanese executives were feasible is demonstrated by the repeated and uncontroverted representations of Japanese manufacturing defendants' counsel that, with the exception of Mr. Yajima who died in 1968, all of the diarists and all persons whose names were focused upon during the evidentiary hearings are alive and well in Japan, still employed by their companies, *fn134" and that they have been available for depositions throughout this litigation. *fn135"

 Defendants' explanation for plaintiffs' litigation strategy is not gentle. It is stated in the "Memorandum of Certain Defendants in Support of their Position that Materials from the JFTC Proceeding Are Not Admissible in Evidence" (pp. 3-4) as follows:


Indeed, it seems clear that it was precisely because the Japanese materials do not constitute records of the only two matters that could make them properly probative in this case, that plaintiffs chose not to follow the normal route of taking depositions to lay a proper foundation for their introduction. Plaintiffs knew that such depositions would not be helpful to their case and that, at the end of such discovery, while they might have come up with admissible evidence regarding discussions of "bottom prices" by six companies for two years (1965-1966), they would not come up with any admissible evidence of the creation of a U.S. export invasion fund or of a United States predatory price agreement. They, therefore, seized upon the ploy of attempting to introduce the materials without proper foundations and without any opportunity by the other side to cross examine and arguing to the jury that all kinds of wild inferences can be drawn from a handful of cryptic and basically incomprehensible "export references" found in materials which were obviously not written to record export activities. Since plaintiffs' direct case will last for some months, the jury will be hopelessly prejudiced by such tactics before the first of the defendants could even be heard.


In furtherance of this approach, plaintiffs adopted the tactic of piling into the FPS hundreds of thousands of materials and spuriously arguing that they are all evidence of conspiracy, so that they could create the argument that it would be extremely burdensome for them to lay foundations in the normal way, even though their PPTM and summary judgment briefs show that they are, in fact, relying on a relatively small number of such Japanese materials.

  While we do not endorse defendants' rhetoric, we do note that we find more than a kernel of truth in defendants' evaluation of plaintiffs' litigation strategy. As we have suggested, their observations apply not just to the materials from the Six Company Case, but to many other materials in the case as well.

 Notwithstanding our exclusion of the diaries and memoranda, there was certain evidence from the JFTC proceedings which we did admit and which must be considered in connection with our evaluation of the activities of the Tenth Day Group and the other "conspiratorial" groups. We refer specifically to the JFTC testimony, which we held admissible, with the exception of export references, against the defendants in the Six Company Case, *fn136" and to the protocols given to the JFTC investigators which we found admissible against the employer of the executive giving the protocol. Moreover, as we have noted above, plaintiffs have now placed reliance upon a number of other documents which they did not find important enough to proffer during the pretrial evidentiary hearings, but with which we shall have to reckon. Against this background, we turn to a discussion of plaintiffs' evidence as to the "secret conspiratorial meetings."

 Any such discussion must take into consideration the two facets of plaintiffs' claims: the home market and the export market aspects of the "unitary" conspiracy. *fn137" Although the vast bulk of the JFTC materials relates to the home market, there are smatterings of export references which the plaintiffs contend are evidence of an export conspiracy. Because the references are all mixed in together, we do not find it useful to analyze the evidence separately as to each "conspiratorial" group. Rather, we shall look at what the record as a whole shows, first about the home market aspect of the "unitary" conspiracy and then about the export aspect thereof. The bulk of the relevant references is from the Six Company Case record, although we include within the compass of our discussion any other documents that plaintiffs have relied upon in this area of the case.

 (b) Evidence of the Home Market Aspect of the "Unitary" Conspiracy; the Plaintiffs' "War-Chesting" Claims

 We have canvassed the evidence and sought to extract therefrom the version most favorable to plaintiffs of what occurred at the meetings of the numerous groups and associations identified by the defendants in their answers to interrogatories and of the relationship of those meetings to the Japanese domestic CEP market. What we have gleaned, largely from the JFTC protocols and testimony but also from other admissible evidence of record, may be summarized as follows. *fn138"

 The Tenth Day Group and the other groups metamorphosed from social gatherings to hard core business gatherings involving exchange of information some time near the end of 1964 or in early 1965. The domestic TV market was then oversaturated, and there was tremendous retail price-cutting competition. The period from 1960 to 1965 had seen a steady decline in the price of monochrome TV, so that there was already a relatively low price threshold, and the manufacturers were concerned about the possibility that the retail market might collapse. Accordingly, they entered into serious discussions at the Tenth Day Group about a variety of business matters. It is apparent that their primary concern was prediction of demand so as to avoid overproduction, oversaturation, and further price decline. *fn139" However, there was also discussion at the Tenth Day Group meetings of so-called "bottom prices" and of wholesale, retail, and rebate margins.

 The evidence all points to the conclusion that the "bottom price" was the lowest price that any manufacturer would charge. It is indisputable, however, that under the practice as it existed, any manufacturer could quote as a bottom price as low a price as it wished, but that once that bottom was determined, it was the general understanding of the manufacturers that no one would sell below that bottom for some (undetermined) period of time. Mr. Yajima of Toshiba defined bottom price as the "target" price, or the price where the price level ought to be within a foreseeable period, such as six months. The evidence is strong that there was no agreement on bottom price and that ultimately everyone was free to proceed with whatever bottom price he wished; *fn140" however, for purposes of the motion for summary judgment, we assume that there was such an agreement.

 It is important to note that the "bottom" price was not the actual retail selling price, but rather the suggested retail (or so-called "cash normal") price. Yajima, for example, testified that the conferees were not overly concerned about the bottom price. He noted that a higher bottom price did not necessarily end up being a higher actual selling price, and that there was no relationship between the bottom price and the actual selling price. He said that "they each represent a separate element." Yajima also identified various countermeasure funds, as well as a variety of rebates paid by Toshiba, directly or indirectly to the retailers. He added that fixing only the bottom price and the profit margin rates did not automatically determine the price of TV sets marketed by Toshiba Shoji (Toshiba's marketing subsidiary). *fn141"

 Yajima testified before the JFTC that he would report to his superior, Mr. Kamakura, the bottom price and demand forecast figures disclosed at the Tenth Day Group meeting. Having discussed these matters at the meeting, Yajima said that he could "more or less guess each company's moves." He testified that he could "speculate on the basis of his hunches" what the companies were up to. There was no disagreement, however, on one point that cost of production, company manufacturing and marketing policies, and product line details were never disclosed by one company to another. Yajima, for instance, testified that up-to-date plans of the companies were not discussed at the Tenth Day Group meetings, and that topics so specific in nature were not discussed at all because that might reveal proprietary secrets of each company. Adachi also made clear that the companies did not discuss their profit margins. This uncontradicted testimony in and of itself seriously rends the garment of plaintiffs' conspiracy-cartel theory. *fn142"

  The best that plaintiffs can draw from the Tenth Day Group meetings then is that each company would disclose its projected "bottom" price as well as its projected wholesale and retail margin, and perhaps its rebate figure. Theoretically it was necessary to have agreement on the margins, since otherwise the suggested "bottom" or "cash normal" price would be inefficacious. However, insofar as margins are concerned, the only evidence is that there was considerable pressure to increase the margins, and that the companies during the relevant period agreed to increase the margins, particularly the retail margins, so as to protect the retailers from collapse. This, of course, would have the effect of decreasing the manufacturer's profit, the opposite of what plaintiffs posit in support of their theory of high profits in Japan to war-chest a predatory export raid on the United States market. Concomitantly, any agreement to limit production would also impede that supposed predatory export raid.

 Moreover, and this may be a subtle distinction, but it is an important one, undisputed on the record, it is plain that the thrust of whatever price discussions there were was not to keep prices high, but rather to keep them from going all the way down. Thus, the minimum price which was being set was not a high price, but was rather as low a price as the manufacturers could bear without letting their retail market collapse, i. e., a price consistent with protecting retail margins. As one witness stated, they were talking about targets for the maximum price cut.

 Yajima's testimony is important in this regard. He relates a Tenth Day Group meeting at which Kamakura, Yajima's Toshiba superior, proposed the "daring" figure of 175,000 yen as the bottom price of certain table-top models. Yajima testified that it was simply impossible to market the new line at a price below 180,000 yen, indeed 182,000 yen was the absolute limit. Had they introduced the product at 175,000 yen, they would have undoubtedly gone into the "red." However, it appeared ultimately that Kamakura had merely been trying to "smoke everybody else out," and Toshiba finally withdrew the 175,000 yen price and settled at 180,000 yen. The point is that the bottom price, according to plaintiffs' "star" witness, was in no sense a high price calculated to war-chest a predatory export raid.

 At another point Yajima noted that circumstances did not allow Toshiba to market monochrome TV sets at prices as low as the bottom price. Moreover, according to plaintiffs' evidence, some manufacturers would complain at the meetings that they could not break even at a particular bottom price. The point again is that the so-called bottom prices were not high prices, but rather were relatively low prices, inconsistent with the plaintiffs' war-chesting theory. Indeed, according to the record, throughout the relevant period, bottom prices went down, not up!

 There is also strong evidence, which we accept for F.R.E. § 104(a), though not for summary judgment, purposes, that there was considerable pressure for price cuts, not only to popularize color TV, but also to compete for business, so long as the cuts did not become ruinous. One figure which plaintiffs say was often mentioned in the sub rosa meetings and which is frequently referred to in the protocols and JFTC testimony 10,000 yen per inch was incontrovertibly a function of the common desire to lower, not increase, prices toward the end of popularizing color TV. *fn143"

 At all events, it is plain that there is not the slightest evidence in this record of "war-chesting" activity, i. e., of extracting high profits from the Japanese consumer to fund a predatory export raid on the U. S. CEP market. *fn144" Rather, the evidence is only of efforts to stabilize prices so as to keep them from going too low. The evidence also is only that the wholesale and retail margins which were discussed at the meetings increased. To repeat, all of this would have the effect of reducing the returns of the manufacturers, contrary to the war-chesting theory. Moreover, in terms of company profits, there is nothing in the JFTC record or elsewhere in the record which would establish that defendants made excessive profits in the sale of CEP's in the Japanese market which could constitute a "war-chest" to fund an export low price conspiracy.

 In terms of profits, we note the following colloquy which we had with Mr. Rome, lead counsel for the plaintiffs, during the final summary judgment argument:


The Court: Do you have any evidence of excessive or exorbitant profits that constituted the war chest, Mr. Rome, on the part of Matsushita, Sanyo, Sharp, or any of them?


Mr. Rome: Your Honor, to the extent you inquire about excessive or exorbitant profits, that in my respectful submission isn't required to be shown if there is a difference, if it can be shown that there is a profit being made, a higher price being charged than that which is being charged in the export market.


That provides a financial curb on


The Court: Maybe they paid it all out in dividends. I mean, I don't know what they did.


Mr. Rome: Maybe they did, your Honor.

 PTO 292 at 129-30. *fn145"

 We also note in this regard the substance of two documents offered by plaintiffs. The first is DSS 61, the JFTC testimony of Mr. Tsu Fujio of MEI, in which it is stated that profits in the Japanese CEP industry were very low. The second is a lecture entitled "Commemorative Lecture at the Appreciation Sale for the Attainment of 6 Million National (MEI's Japanese brand name) TV Sets: The Road to Co-Existence and Co-Prosperity," by K. Matsushita, delivered January 1, 1966. The document makes the following comments:


... profit has become very small indeed. It has dropped to half of former levels. .... Although business had been increasing year after year, more or less, profit is decreasing because competition has gradually become severe. In addition, because of general adversity in business there is a stronger impression that profit is decreasing ... (Total) quantity of production exceeds actual demand by far. This is one of the major reasons why profit plummets in these already unfavorable conditions. Another reason for decrease in profits seems to be coupled with (sic) excessive competition among manufacturers, agents, and sales stores, respectively....

 This picture, of recession, plummeting profits, and cutthroat competition contradicts plaintiffs' argument that the Japanese market was characterized by high, monopolistic profits and the absence of competition. *fn146"

  In plaintiffs' submission, the architect of the conspiratorial activity in Japan about which they complain was K. Matsushita, the founder and chairman of MEI. Plaintiffs assert that Mr. Matsushita had prevailed upon the other Japanese manufacturing defendants to avoid competition and to cooperate in order to avoid over-production and destructive price cutting which might lead to the collapse of the retail market. Plaintiffs rely on a number of public statements of Mr. Matsushita in addition to the lecture which we have just quoted. One of the documents they cite is an "essay" entitled "Toward the Year of Restored Business by Overcoming the Slump," also delivered in January 1966. The "slump" refers to the then current condition in the Japanese market, not to exports. This document is cited at p. 7812 of the FPS as evidence that K. Matsushita "explained to the consumer electronics products industry in Japan that competition among rival companies must not be permitted." The essay states:


one of the causes for sluggish business during the past two years was our (mutual) excessive competition. We competed with each other in terms of expanding equipment caused the business slump. Therefore, we must not have excessive competition for plants and facilities even if we do enter a period of prosperity. But, in the future, expansion that produces the effect of competition among rival companies must not be permitted. In a Japanese wrestling match, victory or defeat is important. But we do not compete for victory in business.

 Plaintiffs have repeated Mr. Matsushita's statements again and again as evidence of the home market aspect of the conspiracy. It would be astounding if such public statements could be the foundation of a conspiracy claim. However, even assuming that these statements were acted upon by the Japanese manufacturing defendants, their very formulation does not suggest a conspiracy to gouge the Japanese consumer by charging high prices either to "war-chest" a predatory export raid in the U. S. CEP market, or for any other purpose. Rather, the formulation of the statements is more redolent of efforts to avoid domestic market collapse.

 This first portion of our summary of the evidence concerning meetings of the sub rosa groups makes plain that we have found no evidence of a high price high profit conspiracy to war-chest a predatory export raid on the U. S. CEP market. We turn to the evidence of data dissemination to see if that can alter the picture. Before reviewing that evidence in detail, we are constrained to comment upon a problem we confront in dealing with plaintiffs' data dissemination claims that is far more vexing than one of mere organization the manner in which the data dissemination claims are advanced. Plaintiffs' representations in the FPS tend to be broad and conclusory, to the effect that certain types of data were exchanged among the conferees at certain meetings. However, when the source for the representation is consulted, it generally does not support the conclusory statement. While in some instances that is because the source, while appearing to be a statistical compilation of production, shipment, and inventory figures, is entirely in Japanese, usually it is for a more pervasive reason.

 More often than not, the source for a conclusory statement is a "minute" of a committee meeting (often that of the MD Group or an EIAJ Committee) which contains only a one line agenda item suggesting that some aspect of data dissemination was on the agenda or was discussed, but supplying no detail of the conversations or of the dramatis personae involved. *fn147" For example, a typical EIAJ meeting minute (MIH 012781) says: "Data: ... (4) The 1973 Production/Export Statistics." What can we make of this? To what country were the exports discussed shipped? Obviously, there are many unanswered questions. We cannot draw an inference of conspiratorial activity from a bald statement that some subject may have been discussed without knowing the details of the discussion, the persons who discussed it, or what, if anything, was done as a result. Even where the documents are statistical in nature, a conspiracy cannot be inferred in a vacuum, without knowing how and by whom the statistics were prepared, what the figures represent, to whom they were distributed, and how, if at all, they were used.

 The data dissemination area provides the most graphic example of the folly of plaintiffs' litigation strategy. It may well be that substantive depositions might not, Perry Mason-like, have ferreted out evidence of conspiratorial agreements on price. But they surely would have produced explanations of thousands of documents upon which plaintiffs rely but as to whose significance we can only guess. *fn148" So often, in dealing with the FPS, we feel like we are trying to nail jelly to the wall, as it were.

 Notwithstanding these observations, we shall posit, in connection with our consideration of the summary judgment motions, that a broad range of information was exchanged among representatives of the Japanese companies. The nature of the exchange is what is critical, and we shall flesh out what can best be said for plaintiffs' position in the discussion to follow. As will be seen, there is far more "evidence" of home market data exchange than of exchange of export information. The majority of the cognizable data exchange took place under the aegis of the several subcommittees of the EIAJ and of the MD Group. MITI (and therefore also the JMEA) was also heavily involved, because it sought and obtained a great volume of statistical data from its Japanese manufacturers. We will here summarize the evidence of domestic data exchange as it appears from the EIAJ and sub rosa group documents. In the next segment, we shall do likewise with respect to the dissemination of export-related data.

 It appears that domestic data dissemination occurred on two levels: dissemination by the EIAJ of aggregate statistics based upon information supplied by its members, and dissemination of individual company statistics. There is evidence that the EIAJ disseminated aggregate statistics about past production, sales, shipment, and inventories by region, *fn149" and also that individual company statistics of this variety found their way into the files of other companies. *fn150" There is evidence that demand forecasts were aggregated and distributed. Finally, although it is sketchy and elusive, there is some evidence of "voting" on production. It is important to note that in none of the charts and statistics disseminated through the EIAJ committees or the MD Group is there any evidence of exchange of identifiable price data.

 The foregoing information is gleaned primarily from documents not submitted as DSS's during the pretrial evidentiary hearings. The documents at issue are similar in character to many of the documents excluded in the Japanese Materials Evidentiary Opinion. They have neither been qualified under the exceptions to the hearsay rule, despite omnibus challenge by defendants, nor explained. We note again that: (1) we have no idea from these documents who said what to whom or which company representatives were present and/or voted on any of the proposals; (2) there has been no deposition taken of anyone present at such meetings, so we do not know the extent of detail exchanged or the extent of dissemination; and (3) we do not know whether any of the proposals were implemented. Although the documents are therefore merely suggestive of the kind of information exchange we have described, without providing any specific information, plaintiffs attempt to interpret these documents to suit themselves. Notwithstanding these factors, we assume admissibility.

 Although the foregoing discussion strongly suggests that some kind of data dissemination program existed, the plaintiffs' information exchange claims are not cohesively presented; rather, they are a blunderbuss, amounting to random documentation, referenced helter skelter in the FPS. Moreover, these claims are not supported by evidence which creates a genuine issue of material fact.

 As we have explained in Part VI.A.5, supra, the exchange of aggregate production and inventory statistics is insufficient alone to give rise to an inference of an agreement violative of Sherman § 1 under Maple Flooring. As we explained in Part VI.A.6, supra, to the extent that there is also evidence of the exchange of technical data and of product standardization, that kind of information exchange will not, except under unusual circumstances not present here, give rise to an inference of conspiracy. On the other hand, it may be that the data dissemination in Japan was ancillary to some kind of an agreement to adjust domestic production and avoid oversaturation of the market, although and this is another major flaw in plaintiffs' case the dates of the activity are most unclear. However, even assuming that the defendants were disclosing or signaling their individual production plans, and further assuming that the "vote" was tantamount to some kind of production limitation, there still is insufficient evidence to support an inference of the home market aspect of the "unitary" conspiracy.

 First, there is no evidence of who did what at various meetings or whether any of the supposed plans were implemented. Second, data exchange does not constitute a per se violation, and even exchange of individual production, sales, shipment, and inventory data cannot sustain a conspiratorial inference in the absence of some evidence that the information was used in aid of collusive pricing activity, or of some purpose or effect to stifle competition in the manner charged by plaintiffs, see Part VI.A.5, supra. There is no such evidence. Finally, even assuming that plaintiffs had adduced evidence of some kind of production limitation, that would not be evidence of a "unitary" conspiracy claim for the reasons that follow.

 Although a limitation on production would be consistent with a scheme to keep Japanese domestic prices high, and would further be consistent with plaintiffs' claim that K. Matsushita had persuaded his conferees to "stabilize" the Japanese market against ruinous competition which was driving prices down and threatening the retail distribution system, it is inconsistent with plaintiffs' theory of conspiracy. In analytical terms, the conspiracy could fund a predatory export raid only if accompanied by high prices and high profits in the domestic market. However, as we have seen, see pages 1204-1206, supra, and 1213-1214, infra, the plaintiffs have offered no evidence of high prices and seem no longer even to contend that there was high profitability on domestic CEPs. At all events, the claim is inconsistent with the record, which contains no evidence of a high price conspiracy or of high profits, but which does reflect a policy of increasing the margins of the wholesalers and retailers to protect the distribution system at the expense of high profitability. Accordingly, plaintiffs' domestic information exchange claim is unavailing. *fn151"

  Plaintiffs have thus adduced no significant probative evidence from activities of the sub rosa industry groups or from the data dissemination activities of any of the allegedly "conspiratorial" organizations to support the domestic high price "war-chesting" aspect of their "unitary" conspiracy theory. *fn151"

 (c) Evidence of the Export Aspect of the "Unitary" Conspiracy

 We have canvassed the evidence and sought to determine therefrom whether there is any evidence that an export conspiracy was conceived or implemented at the meetings of the numerous groups and associations identified by the defendants in their answers to interrogatories. *fn152" For the reasons that follow, we find no admissible evidence in the JFTC materials or in any other materials which refers or relates to the setting or coordination of export prices, the exchange of export price information relative to the claimed conspiracy, the impermissible dissemination of other export-related economic data, or any other aspect of the "export" component of the "unitary" conspiracy claimed by plaintiffs. This result follows inevitably from the fact that virtually all of the documents in the JFTC materials that are of major significance to plaintiffs' "export" case were excluded in the Japanese Materials Evidentiary Opinion. Because this aspect of their case is so critical to plaintiffs, however, we have elected to canvass the entire record, analyzing the significant portions of the excluded materials to determine whether the result would change our evidentiary rulings. We also consider some additional documents referenced in the FPS. As will be seen, the result would be no different.

 We begin with the JFTC protocols and testimony. None of the protocols contain any export references. We ruled inadmissible all of the export references in the JFTC testimony with the exception of those in the testimony of Mr. Nishi, Senior Managing Director of Hitachi. See Japanese Materials Evidentiary Opinion at 1293-1294. However, these references are of no help to plaintiffs' case. *fn153" We turn then to the mainstay of plaintiffs' case the documents.

 The plaintiffs' February 12, 1980 submission, see note 152, supra, purports to be a compendium of export-related documents. This compendium lists 310 separate page references from the 6,317 pages in the JFTC record. However, a review of these 310 pages reveals that only a small number of them, amounting to approximately 30 separate references, actually contain language which could be argued to be an "export reference." The remaining pages do not refer to export even peripherally. Moreover, virtually all of the arguable export references relate to exports in general and not specifically to exports to the United States, and thus they are of no probative value.

 In their final summary judgment briefs, defendants analyzed all of the export references. Upon review, we find their analysis (appropriately referenced to the documents themselves) to be accurate, and we draw upon it here. Fourteen of the cited references contain nothing more than estimates of future domestic and export demand or shipments, with no separate breakdown for the U.S. *fn154" We note again that such information exchange, common in trade association activity, is at best for plaintiffs of the Maple Flooring genre and cannot give rise to liability. One reference is a statement by Mr. Yajima that he was neither responsible for nor knowledgeable about Toshiba's export operations; *fn155" and three are statements by Mr. Kamakura of Toshiba, upon whose testimony plaintiffs also rely, that he too had no knowledge concerning Toshiba's export operations. *fn156" A number are passing and innocuous references to exports in general: MJ 2653, 2655, 2656 (excerpt from testimony of Mr. Nishi of Hitachi that the TV industry is an "export industry" and "specialty item of Japanese industry"); TJ 4610 (excerpt from Yajima Diary concerning an internal Toshiba meeting: "export ... more export ... there is a limit domestically...." "Strengthening of export"); TJ 4656 (excerpt from Yajima Diary concerning Tenth Day Group meeting: Hitachi "will domestically distribute TV's for export" a mysterious statement indeed); HJ 50033 (excerpt from diary of Mr. Yamada of Hitachi: "19" CTV: will exhibit at U.S.A. show, but the prospect of actual sales unsure"); HJ 50085 (excerpt from diary of Mr. Yamamoto of Hitachi concerning discussion at the Color TV Committee: "EIA re U.S. market analysis presented by RCA"); TJ 4439-4442 (excerpt from testimony of Mr. Fujio of MEI concerning technical capabilities and capital structure of Japanese companies as compared with U.S. CEP companies); MJ 2927 (statement of respondents' counsel that Mr. Fujio of Matsushita had testified regarding the growth of exports in the home appliance industry).

 Numerous pages of the JFTC record contain the word "export" followed by certain small quantity figures (usually in the range of a few hundred, occasionally in the thousands). These statements are usually from the Yajima diaries and contain no explanation as to what the figures represent. We do not know whether the entries are internal company notes of a meeting with co-workers or quantities passed on to Yajima by someone else within or without Toshiba, nor do we know to what they refer.

 We have paid special attention to the allegations in the FPS and elsewhere about the Okura Group, the Twentieth Day Group, and the MD Group, all of which supposedly dealt with export matters. We have, however, found nothing probative. Despite their centrality to plaintiffs' case, the FPS entries relating to the Okura Group are limited to membership and attendance data, which are not disputed, and to other material which has either been excluded (e.g., materials from Yajima's or some other diary), or which has been demonstrated to be of no value (see discussion of "intent" documents, Part VII.I, infra ). Most of the references to the Twentieth Day Group were contained in materials excluded in the Japanese Materials Evidentiary Opinion. No substantive reference of any significance survives.

 We have carefully reviewed a host of documents submitted by plaintiffs with respect to the MD Group, even though they did not submit these documents for consideration at our in limine hearing. *fn157" The tenor of the MD Group documents was discussed in the preceding segment of this opinion. Those documents mostly refer to intended or expected domestic shipments, and not to export shipments as represented by the plaintiffs. Even if some of them list export statistics, these statistics represent only aggregates; no individual breakdown by company is included. As was the case with the domestic materials discussed supra, these purportedly export-related documents give us no idea what was said or done at any of these meetings or whether the plans or policies discussed in the "minutes" were ever implemented, much less who was responsible for doing so. To the extent that there may have been some kind of "voting" on export shipments of stereos and TVs, we can only speculate as to the nature and results of such voting. *fn158"

 The only portion of the 6,317 pages of the JFTC record which could arguably be called an export price reference is a five line note from the Yajima Diary which reads as follows: "Hayakawa export price olympic 16 inch $ 160 contract 20,000 sets 41% of those for domestic." We can only speculate on the meaning of this cryptic statement. There is no indication of its source or of where Mr. Yajima heard it, and it possesses no indicia of reliability. We explained at length in our Japanese Materials Evidentiary Opinion that the Yajima diaries are inadmissible on multiple grounds. See Part IV, supra. As we have noted, plaintiffs have made no effort to adduce testimony, by deposition or otherwise, to explain any of the cryptic references in the diaries and memoranda.

 What the foregoing description represents is the plaintiffs' litigation strategy, discussed at pages 1200-1202, supra, in action. The principal manner in which plaintiffs have constructed their export conspiracy theory is to draw upon bits and pieces and fragments of sentences and paragraphs in the various diaries and memoranda and, proceeding from the premise that there had to be a conspiracy, fit in the "bits and pieces" to suit their purposes. What plaintiffs have in actuality been engaged in is not logical inference but speculation for, upon scrutiny, the "export references" are illusory.

 The data dissemination record with respect to exports is qualitatively different from that with respect to the domestic market. Other than certain average past price information promulgated by the EIAJ, there is no evidence of price information exchange. There is evidence of demand forecasts for exports, but there is no evidence of any substance of "voting" on expected exports. Neither is there any evidence of exchange of production, shipment, and inventory data except for aggregates. Moreover, the aggregate figures do not even provide discrete data as to the U.S. *fn159" But assuming that they were otherwise probative, plaintiffs still could not establish the "unitary" conspiracy to destroy the U.S. CEP industry via such worldwide figures. *fn159"

 We concluded in Part VI.A.5 that cases which have found Sherman Act § 1 violations as a result of data dissemination have either involved an exchange of detailed, individually identifiable, actual price data, a concentrated industry, and a purpose or effect to restrain competition, or some other evidence of an actual agreement to restrain competition. Exchange of aggregate data and most non-price data, such as market conditions, trends, and forecasts, has generally been permitted, at least in the absence of some evidence of an agreement to use the information to fix prices, adjust production, or allocate market shares. Under these standards, plaintiffs' export-related data dissemination case fails the summary judgment test.

 Even were we to assume that the record contains cognizable evidence of exchange of individual past production, sales, shipment, and present inventory statistics in the export context, such evidence would not help plaintiffs' case either. We explained in Part VI.A.5, supra, why this kind of data exchange does not tend to show a Sherman Act violation, at least, as here, in the absence of evidence of an anticompetitive purpose or effect. At all events, the kind of information exchanged in the export context is more in the Maple Flooring than the Container Corp. mode.

 Another problem with the data dissemination point is of equal significance: plaintiffs have shown no evidence of a logical nexus between the information exchange and the alleged conspiracy. First, even though there is no admissible evidence of "voting" on export shipments, it would not help plaintiffs' case if there were. While an agreement to adjust production levels might, under some circumstances, be helpful in keeping prices high, such an agreement is not consistent with the main thrust of plaintiffs' export conspiracy theory, for it is illogical to assume that a group of companies that sought to flood the American market with CEPs at artificially low prices would agree to limit production.

 Moreover, as explained in Part VI.A.5, supra, information exchange is not per se illegal, and is only found to be unreasonable when it is conducted as part of or in furtherance of some anti-competitive scheme. While the anti-competitive agreement can be inferred from the data dissemination in some circumstances, in the circumstances of this case the conspiracy posited by plaintiffs cannot, as a matter of logic, be inferred from the types of data exchange activities purportedly described in these documents. The U.S. CEP market is an open, competitive market; the defendant companies, as new entrants into that market, had no power to affect either output or prices in that market. Thus information as to past shipments, present inventory, or forecasted demand would not be useful to alleged participants in a conspiracy to export at low prices to the U.S. market.

 Plaintiffs, of course, proceed from the premise that the defendants had allocated the U.S. market via the Five Company Rule and that they were acting in concert in the U.S. market as a "monolith," competing only against the U.S. CEP manufacturers. In plaintiffs' submission, those activities would protect manufacturers pursuing a low price policy from ruination, or at least from substantial losses. However, there is no evidence to support these premises. There is no evidence of market allocation, see Part VII.F.2, supra, and no evidence that the defendants acted in concert with respect to exports (or that they administered or policed their supposed arrangement, see p. 1240, infra). *fn160" Moreover, there is no evidence that the defendants were able accurately to predict U.S. demand. Even if there were such evidence, the notion that this information would so strengthen the coconspirators as to enable them to effect their low price conspiracy is illogical given the uncontradicted information in the record about U.S. market conditions: Zenith and RCA had close to 50% of the market, there was competition among a large number of manufacturers, etc. To put it charitably, the analytical possibilities of a nexus between plaintiffs' evidence and the concerted predatory pricing conspiracy theorized by plaintiffs range from non-existent to gossamer, especially given the onus of a rule of reason test.

  In sum, the scenario portrayed by plaintiffs, even assuming that there were evidence to support it, cannot be a viable part of their "unitary" conspiracy theory in the absence of evidence, direct or circumstantial, of concerted pricing activity, and there is no such evidence. But even assuming that plaintiffs had admissible evidence which might permit an inference that there was an export production limitation, that would not be sufficient under the facts of this case to permit an inference of concerted pricing activity, since for the reasons stated above, such an inference would be illogical here. The short of it is that our canvass of the record of documents generated in Japan shows no evidence, direct or circumstantial, on which plaintiffs' claim of a predatory export conspiracy can be founded.

  (d) The Six Company Case Conclusion

  Our conclusions about the significance of the Six Company Case materials are not a function of the JFTC's July 27, 1978 termination order, which stated that the commission had not been able to reach a conclusion. Neither are they a function of the fact that in the Six Company Case the JFTC did not itself allege a "high price" conspiracy. Instead, they are a function of our independent review of the documents produced as a result of the Six Company Case and proffered here by plaintiffs. These documents do not show a massive worldwide thirty-year conspiracy to fix prices of Japanese CEPs at home and abroad. Actual prices and actual rebates and discounts were not discussed at the meetings relied upon by plaintiffs. During the period of the alleged conspiracy, the "bottom" or suggested list prices allegedly discussed dropped, while the wholesale and retail margins which were discussed rose, all of which would have had the effect of reducing the returns to the manufacturers, contrary to the "war-chest" theory. Moreover, the data dissemination evidence is essentially non-probative.

  There is simply nothing in the JFTC proceedings which supports the claim of a high price "war-chesting" conspiracy in Japan. The following colloquy is instructive in this regard:


"THE COURT: .... Do they (the protocols) demonstrate in terms of specifics, that the level at which they fixed the prices was artificially high?


MS. LARKIN: (Counsel for plaintiff) They demonstrate that they were setting a price without specifically addressing whether it was a high price or low price, but that it was an artificially created price decided among them, and the level of it being a high price conspiracy is something which we would prove by other documentation.


THE COURT: What other documentation?


MS. LARKIN: Well, the model price comparisons for one." *fn161"

  Whether or not Ms. Larkin's statement represents an abandonment of the "high price" conspiracy claim, it is clear that there is no evidence of such a conspiracy in the JFTC record. *fn162"

  Finally, the JFTC record does not show an export conspiracy. Indeed, export prices and export terms of sale were not discussed at the meetings relied upon by plaintiffs, and according to the only viable evidence on the point, in the JFTC protocols and testimony, most of the attendees were not involved in export business and had no knowledge of export matters.

  Notwithstanding plaintiffs' broad conclusory allegations about the role of the Okura Group, the Twentieth Day Group, and the MD Group as vehicles for the export aspect of the alleged conspiracy, our careful canvass of the record has revealed no admissible evidence which refers to or relates to setting export prices, improperly exchanging export price information, or any other evidence of a low price export conspiracy. And evidence about the data dissemination of non-price matters is non-probative. The record of the Six Company Case taken all together thus does not supply any evidence which will help plaintiffs create a genuine issue of material fact on plaintiffs' television receiver conspiracy claims. *fn163"

  For reasons of convenience, we have subsumed within the foregoing discussion of the materials from the Six Company Case certain matters dehors the record of that case, especially the EIAJ documents relating to certain types of data dissemination. That fact has not altered our focus or changed the result. We turn now to plaintiffs' case as it is built upon the other EIAJ documents.

   3. The EIAJ

  The Electronic Industries Association of Japan ("EIAJ") is a trade association to which a number of defendants have belonged since at least 1952. *fn164" The EIAJ operates through a large number of committees which deal with virtually every aspect of the manufacture, distribution, and exportation of CEP's (and certain other electronic products). The plaintiffs, in Appendix A to their FPS, identify some 86 committees of the EIAJ. As we have noted, in that Appendix they also identify the individual members of the various committees, naming the company employing that individual as well as the source of the information as to membership. This description alone consumes some 294 pages. The vast majority of the "conspiratorial meetings" listed in the Calendar of Conspiratorial Meetings which constitutes Appendix B to the FPS are EIAJ committee meetings. Plaintiffs' description of the activities or alleged activities of the EIAJ and its various committees is spread over some 550 pages of the FPS.

  In both their PPTM and their FPS plaintiffs have set forth a list of the names of "some of the principal, pertinent committees of the EIAJ," which "convey a sense of the variety of the matters which received joint attention by defendants during their EIAJ committee meetings." PPTM at 105. They lay the heaviest stress on the so-called export committees: the TV Export Committee, the Radio Export Committee, the Tape Recorder Export Committee, the Transistor Radio Export Stabilization Committee, the Electron Tube Export Committee, and the Parts and Components Export Committee. The entire list, as presented in plaintiffs' PPTM, is set out in the margin. *fn165"

   Plaintiffs thus have gone to enormous length to document the existence of the various committees of the EIAJ and the membership of those committees, despite the fact that defendants concede those points. What is really at issue is the nature of the activities of the EIAJ; we turn to plaintiffs' evidence in that area. *fn165"

  The plaintiffs contend that the EIAJ committees served as fora for discussion of and agreement upon export and domestic prices of CEP's and for consultation and agreement upon "virtually every other phase of the manufacture, sale and exportation of consumer electronic products." PPTM at 105. The plaintiffs further allege that the formation of the JMEA and the EIAJ facilitated the achievement of the objectives of the defendants' conspiracy by providing two important vehicles for communication among the Japanese manufacturers and their affiliates. Moreover, according to plaintiffs, one of the first steps taken by the EIAJ was the elimination of competition among defendants by the creation of the so-called Market Stabilization Council, which we will discuss in Part VII.G.5.

  Plaintiffs first seek to draw an inference of conspiracy by the mere demonstration of the names of the various committees, their membership lists, and the dates of their meetings. As we have seen in Part VI.A.4, supra, such an inference is improper, for mere opportunity to conspire is not probative of actual conspiratorial activity. Moreover, no inference can be drawn from plaintiffs' surmise, based apparently on the name, as to any given committee's purpose. The enormous amount of effort which plaintiffs have spent in listing the names of the various committees, identifying particular committees as part of the EIAJ, and explaining who attended the meetings of each committee, and when it met, all of which creates no inference of conspiracy, itself suggests the weakness of plaintiffs' claims.

  Plaintiffs next seek sustenance in the General Rules of the EIAJ, which set forth a series of general purposes, subsidiary objectives, and authorized programs. According to the General Rules, the EIAJ's purpose is to bring about the prosperity of the manufacturers through the mutual cooperation of the members, and one of its subsidiary objectives is to expedite the overall growth of the electronics industry. Among the programs expressly established in the General Rules is one for the collection of statistics and data and "affiliation and cooperation with other industrial associations related to the electronics industry and other related organizations." (Article IV). However, these objectives and activities (and those set out in the margin) *fn166" are insufficient to create an inference of conspiratorial activity. First, they are too general; conspiracies are made of more specific stuff. Second, and more important, all of these matters come within the purview of what we have explained in Part VI.A.5, supra, as the kind of trade association, data dissemination, and product standardization activities which do not offend the Sherman Act.

  The crowning touch to plaintiffs' presentation concerning the EIAJ is their discussion of agenda items allegedly discussed at EIAJ meetings. *fn167" The Matsushita defendants, in one of their final summary judgment memoranda, offered the following sample of agenda items which we find to be fairly representative of what appears in the FPS and the documents:


(1) Market conditions and trends in the United States and other countries;


(2) Public relations and lobbying efforts within the United States;


(3) Compliance with various U.S. regulations concerning such matters as the designation of country of origin on imported products and product safety;


(4) Various investigations and proceedings instituted in the United States and Canada against Japanese CEP manufacturers calling for the imposition of import restrictions, including anti-dumping proceedings, the countervailing duty investigation, the "escape clause" investigation, and the U.S. International Trade Commission § 337 proceeding initiated by Sylvania;


(5) The effect of United States import surcharges;


(6) Concern about protectionist sentiment in the United States and the threat of import restrictions in the U.S. market;


(7) Export statistics;


(8) After-sales service in the United States;


(9) Standards for testing the performance of televisions for export to the United States;


(10) Televisions donated to India;


(11) Requests for pricing information from MITI;


(12) Restraints on exports to Western Europe;


(13) The effect on television exports to the United States of the Japanese government's decision to float the yen.

  In order to give a complete picture of the agenda items reflected in the FPS, we comment specially on four categories. First, the agendas place a heavy emphasis on technical matters, particularly those relative to product standardization and product safety. Secondly, we note a significant number of agenda items reflecting joint efforts to deal with the Japanese government with respect to Japanese commodity tax law. Third, we note repeated agenda consideration of simplification of export procedures. Fourth, there is frequent reference to exportation problems with countries around the world, such as West Germany, the Benelux countries, and Canada.

  Our discussion in Part VI.A.5 (Data Dissemination), (and in the preceding segments of this Part VII) and Parts VI.A.6 (Product Standardization and Technical Research Exchange) and VI.A.8 (Joint Activities in Promoting Public Relations and Joint Legal Action in Response to Common Problems), supra, makes clear that these agenda matters, without additional evidence of the kind plaintiffs failed to adduce, e.g., evidence of price fixing or exchange of identifiable actual price data, or of an actual agreement (or a purpose or effect) to restrain competition, are not, alone or together, or coupled with all the other evidence in the case, a basis for inferring an antitrust conspiracy in violation of the Sherman Act.

  We have reviewed all of the plaintiffs' translated material relating to the EIAJ and its various committees in an effort to determine the existence of support for the broad conclusory statements in the FPS alleging that the EIAJ engaged in conspiratorial activities. Consistent with our earlier declarations, we shall not burden the record by recounting all such matters, limiting ourselves to the more important groups of documents. However, it is essential that we state our conclusion from this review: we can find nothing in any of these materials (primarily documents) to implicate defendants (or any one of them) in the unitary conspiracy asserted by the plaintiffs, or in any aspect thereof.

  One of the EIAJ Committees which must be accorded special mention is the so-called Television Business Committee. Although plaintiffs apparently did not feel the Television Business Committee sufficiently important to submit any of its documents during the course of our in limine hearing, plaintiffs' apparent heavy reliance thereupon as reflected by their post-summary judgment argument submission of a large volume of TV Business Committee "minutes" prompts this special comment. *fn168"

  None of the "minutes" reflect the involvement of the Committee with export matters. Indeed, in the 61 meetings, there are only six passing references to exports which are of no significance whatever and do not point in any way to an export conspiracy. *fn169" Of primary concern to this Committee, as reflected by the "minutes," were commodity taxes, safety, consumer protection problems, government regulations, *fn170" transmission interference, stimulation of demand for television in Japan, and educational television. This is amply illustrated by the frequency with which certain topics were discussed. For example, commodity tax matters were discussed at 26 meetings, and safety matters were discussed at 22 meetings. The short of it is that the Television Business Committee was solely a domestic committee and that no export conspiracy was created at its meetings. Moreover, as we have seen, the product safety and government relations concerns plainly do not create an inference of Sherman Act violation, see Parts VI.A.6 and 8, supra.

  The minutes also show an intense involvement by MITI in the activities of the Committee. MITI representatives were in attendance at numerous Committee meetings. Moreover, a review of the minutes reveals that even when MITI officials were not physically present, much of the Committee's time and energy was spent discussing requests made by MITI or preparing materials to submit to MITI. For example, at the October 15, 1973 meeting (D 15109-11), the following items were apparently discussed:


Pre-heat presentation to MITI


Issues concerning advertising and labelling of home electric appliances


Report on MITI's proposed guidelines and the attitude of Tokyo's sanitation department on the question of large-size waste disposal


MITI's request for materials relating to model changes


Report on a meeting with consumers sponsored by MITI


MITI's expected announcement of new administrative guidance regarding retailers pressing for new purchases rather than procuring replacement parts.

  We fail to see how such evidence helps plaintiffs' claims. *fn171"

  Three additional groups, related to the EIAJ, must also bear special mention: the Japan Light Machinery Information Center (because the plaintiffs made so much of it in the final round of briefs), the Color TV Manufacturers' Fair Trade Council, and Konshin Kai (because these latter two are the subject of a post-summary judgment argument sally and apparently thought by plaintiffs somehow to resurrect their case).

  Although it might be considered an activity in the U.S. rather than in Japan, because the Japan Light Machinery Information Center allegedly is an arm of the EIAJ, we shall deal with it here. Plaintiffs state in their FPS:


"The defendants created and funded, through the EIAJ, the Japan Light Machinery Information Center in New York....


The JLMIC acted as liaison between the United States' subsidiaries of the defendants. The JLMIC also facilitated the communications between the EIAJ and JMEA in Japan and the U.S. subsidiaries. In fact, the JLMIC has been referred to as the "EIAJ-N.Y."


S at 4851. n.172


Plaintiffs allege in their FPS that the JLMIC received information concerning JMEA Agreements (FPS at 4862); forwarded information to the JMEA regarding market penetration, current events and marketing (FPS at 4856-4858); relayed information concerning import statistics and estimates of future demand (FPS at 4855); discussed the possibility of import restrictions (FPS at 4867); and promoted Japanese products in the United States (FPS at 4854).


The bulk of the documents cited in support of these claims are copies of the JMEA Association News which cover a multitude of topics, dealing with a multitude of products (e.g., cameras, clinical thermometers, optical equipment) and with dealings of Japanese firms in the four corners of the globe. Accounts of activities of the New York Light Machinery Center generally concern that Center's reports on proceedings in the United States which were being transmitted back to Japan. For example, document MA296, on JLMIC stationery, simply tells EIAJ members about testimony given at hearings of the Tariff Commission. Other typical entries, set out in the margin, taken from documents relied upon in the FPS, demonstrate that plaintiffs' conclusory statements ascribing a role in the "unitary" conspiracy to JLMIC activities are not borne out by the documents. *fn173" At best, these matters reflect harmless (and ostensibly pro-competitive) data dissemination. See Part VI.A.5, supra.


The documents cited were not proffered as DSS's during the pretrial evidentiary hearings and are, as of this writing, unauthenticated hearsay documents. However, we assume admissibility and note that defendants do not deny that: (1) the JLMIC was created by the EIAJ for the purpose of promoting the export of products manufactured in Japan into the United States; (2) the JLMIC would furnish to the EIAJ statistical data for consumer electronics imports and estimates for future demand of CEP imports; (3) that the JLMIC forwarded other information as to the progress of the dumping proceedings back to Japan. But, to repeat, these actions do not give rise to an inference of Sherman § 1 liability.


The conclusory statements in the FPS that the innocuous documents which we have mentioned are evidence that the JLMIC coordinated a "cover-up" of activities among the Japanese manufacturers for the record are also not supported. *fn174" Because of their litigation strategy, see pp. 1200-1202, supra, plaintiffs have not taken the deposition of anyone connected with the JLMIC to shed light on the documents related to the JLMIC's activities, nor will they, since the FPS lists no such witnesses. Thus, we are relegated to the documents, which do not advance plaintiffs' case at all.


The Color TV Manufacturers' Fair Trade Council is referenced in plaintiffs' post-summary judgment argument memorandum of September 22, 1980, which lists a large number of documents which supposedly reflect conspiratorial meetings. However, all of these documents are in Japanese. In the same memorandum, plaintiffs referenced a group known as "Konshin Kai." *fn175" They cite some 32 pages of documents referable to that group, but again, all of these documents are lodged in the document depository in Japanese. To repeat, we will not consider documents which are not in compliance with valid case management orders.


As we stated earlier, our discussion does not purport to summarize everything that the plaintiffs have said about the EIAJ and its committees and subcommittees and affiliated groups, but it sets forth everything of any significance. *fn176" However, nothing in any of these materials constitutes any basis, alone or in conjunction with other evidence, for creating a genuine issue of material fact as to the existence of a "unitary" conspiracy among the defendants.


We cannot conclude the EIAJ segment of this opinion without referring to the fact that, during the final summary judgment argument, defense counsel addressed plaintiffs' allegations as to the EIAJ's committees for several hours, demonstrating that the documents referenced in the FPS showed nothing, or at least did not add up to probative evidence raising any material factual issue. Yet plaintiffs have provided no citations to any documents to counter defendants' arguments, and have advanced no specific answer since the argument. They have, however, devised an approach to the problem an attempt to shift the burden to the defendants to prove that they were not engaged in conspiratorial activities.


Referring during the course of his final summary judgment argument to the numerous meetings of the defendant groups, plaintiffs' lead counsel, Mr. Rome, observed that defendants "weren't just whistling Dixie" at these meetings (PTO 291 at 36-37). Mr. Rome argued that an adverse inference could be drawn as the result of defendants' failure to rebut plaintiffs' contentions about the conspiratorial nature of the meetings. In other words, defendants, to avoid an "adverse inference," have to prove a negative: that never during any of the hundreds of meetings of dozens of trade associations and other groups, over a period of more than two decades, did defendants do whatever it is plaintiffs are complaining about. Such an argument falls of its own weight. *fn177"


Continuing in this vein, plaintiffs, in their Supplemental Post-Argument Memorandum in Opposition to Defendants' Motions for Summary Judgment, have listed the names of a number of individuals who attended meetings of the export committees of the EIAJ (TV, radio, stereo, and electron tube) and have complained that "defendants have failed to provide affidavits" from any of these individuals. To repeat, under the law governing summary judgment discussed in Part V, supra, that is not their burden. Notwithstanding plaintiffs' innuendos, their evidence of activities of the EIAJ amounts to nothing.


4. The JMEA and the Television Export Council


The Japan Machinery Exporters' Association ("JMEA"), a trade association of companies engaged in machinery export, was formed in 1952. The JMEA's membership is comprised of more than 500 Japanese companies engaged in the export or manufacture for export of aircraft, ships, motor vehicles, bicycles, many kinds of industrial, agricultural, and business machinery, roller bearings, sewing machines, and home appliances, in addition to CEP's. Defendants MEI, Toshiba, Hitachi, MC, Sanyo, Sharp, and Sony, as well as various of their subsidiaries, were, at all times relevant to this case, members of the JMEA. The JMEA is divided into sections and committees that deal separately with various aspects, including exportation, of the wide range of products, including CEP's, exported by the member companies. *fn178" The JMEA was first established under Article XI of the Japanese Export and Import Trading Law (Law No. 299, August 5, 1952, as amended) (EIT law). Its purpose, as set forth in Article I of the Articles of Association, echoes the central language of the EIT law:


"The purpose of this association shall be to promote the development of a sound export trade in machinery through the prevention of unfair export transactions, the establishment of an orderly system of export, and engaging in undertakings designed to advance the common benefits of its members."

  JMEA's Articles of Association, Article I (1977). Despite plaintiffs' contention, this language does not point to the existence of a conspiracy.

   Plaintiffs claim that the JMEA "was formed ... to effectuate various agreements among its members regarding export of consumer electronic products from Japan," FPS at 4585, and that it provided "a forum for joint discussion and coordination of price levels of television receivers" exported to the United States, FPS at 4590. However, plaintiffs' evidence consisting of defendants' interrogatory answers and materials from the JMEA's Association News and other documents of doubtful admissibility does not bear out their claims.

  According to plaintiffs' evidence about JMEA meetings (and assuming arguendo its admissibility), *fn179" various JMEA committees purportedly met to discuss such subjects as (1) market conditions in the United States and other countries; (2) possible, potential, or actual import restrictions, impositions of dumping duties, surcharges, or other restrictions with respect to consumer electronic products to be imported into the United States; (3) simplification of export procedures; and (4) export regulations affecting countries other than the United States. *fn180" None of these can give rise to liability.

  Dissemination of generalized information about (U.S.) market conditions is not improper for, as we explained in Part VI.A.5, supra, exchange of such information is usually considered pro-competitive. Since concerted action to confront government regulation which affects an industry cannot be the subject of antitrust liability under the principles explained in Part VI.A.8, supra, mere discussion of that governmental regulation cannot be probative of the conspiracy alleged by plaintiffs.

  The JMEA was concededly the vehicle through which the Manufacturers' Agreements which we have discussed in the preceding section were drafted and implemented. As the foregoing discussion makes clear, both the JMEA charter and its actual operation demonstrate its close relationship to MITI. Notwithstanding all of their pejorative and conclusory statements, and 270 pages of the FPS, our review of all the (translated) JMEA documents, including those related to the various JMEA committees, makes clear that what plaintiffs have documented about the price-related activities of the JMEA, assuming admissibility of the underlying evidence, is essentially that the Manufacturers' Agreements were developed by close cooperation between the JMEA and MITI; that the setting of check prices was effected at JMEA meetings attended by MITI representatives; and that the JMEA regularly assisted MITI in performing various ministerial duties and acted as the vehicle for implementation of the export control arrangements.

  As the scope of the JMEA's activities would suggest, see p. 1221, supra, there are countless entries in the JMEA newsletters reflecting the worldwide scope of the JMEA's activities in export-related matters. For example, the JMEA Association News for the period 2/11/69 to 3/10/69 (Sony document # 0527-0531) contains such entries as: the Export Insurance Committee; Countermeasure Council on Australian Tariff; Industrial Machine Section (discussion of plan to send a group to investigate the African markets and to plan and compile a guidebook; study of intensified PR for the commodities shipped to Central and South America; and decision to survey (the Indonesian market); explanatory meeting on yen credit to the Philippines; preview of the 8mm promotional movie on pesticide disbursing equipment; and explanatory meeting on trade situation with Iraq.

  The short of it is that the only evidence that plaintiffs have adduced as to the JMEA either relates to traditional trade association activities or else to the involvement of the member companies with the export control arrangements which we have described in the preceding segment of this opinion. However, we have already explained that plaintiffs, as competitors, cannot suffer antitrust injury from the Manufacturers' Agreements and JMEA Rules, Part VI.B. supra. Since these arrangements cannot give rise to antitrust liability, plaintiffs have added nothing to their case against summary judgment by their dissertation upon the JMEA. *fn181"

  We separately discuss the JMEA-sponsored Television Export Council, albeit briefly, because plaintiffs have, at least in earlier submissions in the case, asserted that it was one of the prime vehicles for implementation of defendants' export conspiracy to destroy the U.S. CEP market, and because plaintiffs offered six Television Export Council documents as putative "smoking guns" at the pretrial evidentiary hearings. The Television Export Council was created under the Manufacturers' Agreements to serve as a liaison between the manufacturers and MITI, and functioned as a vehicle for registration of customers and brand names. Television Export Council meetings were attended by MITI representatives; at these meetings, the level of check prices was often discussed.

  The documents to which we have referred, DSS 1030 to 1036, are discussed at pages 1310 to 1313, of the Japanese Materials Evidentiary Opinion. For the reasons there set forth, they are inadmissible. There has been no admissible evidence called to our attention (and our independent document review reveals none) tending to show that the Television Export Council was a vehicle for conspiratorial activity as alleged by plaintiffs. Rather, at most it was the vehicle for determining the minimum or "check" price. We thus conclude our discussion of the Television Export Council with the same comment that we made in connection with our discussion of the activities of the JMEA since the check price agreements create no liability, neither does anything that happened at the Television Export Council.

  5. The Market Stabilization Council, The Nine Essential Points of Implementation, and The Four Associations Conference

  Plaintiffs' earliest "evidence" of the alleged home market price fixing conspiracy emanates from JFTC Case No. 5 of 1957 (the Market Stabilization Council Case), which was brought against the Home Electric Appliance Market Stabilization Council, five of whose members are defendants in this action, *fn182" and the National Federation of the Associations of Radio and Electric Appliance dealers. In plaintiffs' submission, the Council was an industry-wide group formed to "stabilize" the domestic market in electric appliances (the so-called, "white goods": refrigerators, washing machines, etc.), as well as in CEP's, by setting and maintaining artificially high prices and by policing the agreements reached by its members. *fn183"

  We dealt in our public records opinion with the plaintiffs' efforts to introduce into evidence the Recommendation Decision of the JFTC in the Market Stabilization Council case. For reasons set forth at length in that opinion, at 88-111, the Recommendation Decision is inadmissible. Apparently recognizing the finality of that evidentiary decision, at least before us, plaintiffs now place heavy stress upon the alleged conspiratorial impact of a document which was an exhibit to the Recommendation Decision, but which plaintiffs never proffered or even referred to at the evidentiary hearings. That document is entitled "Nine Essential Points of Implementation."

   The Nine Essential Points of Implementation provide as follows:


I. Manufacturers and the National Radio Federation will, in cooperation with each other, make arrangements to complete the attachment of price cards to the three kinds of goods within a certain period of time;


II. Posters concerning selling at the list price will be printed and distributed.


III. A monitoring organ will be established for each Chapter.


IV. Vigorous implementation of the items of understanding on the prohibition of wholesale-and-retail paralleling by wholesalers. (A material indicating to this effect will be shown in the stores of the wholesalers.)


V. Badges will be made for sellers, and every member of the Association will be required to wear one.


VI. Manufacturers will jointly stage a campaign directed to sellers for the maintenance of the list price.


VII. A Price Maintenance Committee will be established.


VIII. A presidents' meeting will be held in the future for the purpose of adjustment of production and the maintenance of price.


IX. Manufacturers will cooperate in the advertising by department stores.

  By way of laying foundation, plaintiffs have asserted that the Nine Essential Points were identified in Answers to Interrogatories of various defendants, that "defendants admitted drafting" the Points, and that defendants have also "admitted implementing" them by virtue of establishing the Market Stabilization Council. In plaintiffs' submission, the Japanese Manufacturing defendants have made these admissions by specific joint interrogatory answers by which they are bound. Defendants stoutly deny plaintiffs' contentions.

  The record regarding the Nine Essential Points is not extensive. It consists of the Nine Essential Points themselves, which are set forth on a one-page, unsigned, undated document, and also that portion of the "Response of Certain Defendants to Plaintiffs' Interrogatories to Defendants Concerning Japanese Trade Associations and Other Groups" *fn184" that deals with the Market Stabilization Council (that portion makes reference to the Nine Essential Points). The problem with plaintiffs' position is the text of the interrogatory answer itself. The answer states that the Market Stabilization Council was formed in 1956 with sixteen Japanese Companies, including some, but not all, of the defendants in this action, as original members. It also states that in 1956, "certain of the manufacturers drafted a statement entitled "Nine Essential Points of Implementation' setting forth a proposed course of action. Immediately thereafter the Council was established" (emphasis added). The record does not identify who those "certain manufacturers" were. Nor is there anything in the record to support plaintiffs' contention that "the defendants" or any of them admitted implementing the Nine Essential Points, or, indeed, that anyone ever implemented the Nine Essential Points. There is not even any evidence that the Market Stabilization Council ever adopted the Nine Essential Points after its formation.

  It may be that plaintiffs will derive no benefit from the Nine Essential Points solely because of their failure to lay a foundation for the evidence, and that in reality, as plaintiffs surmise, the Nine Essential Points were drafted, agreed to, and implemented by these defendants. However, we cannot engage in surmise. The fact is that the absence of any record concerning the "Nine Essential Points" is a result of plaintiffs' conscious litigation strategy not to seek explanatory discovery on this subject or any other relating to material generated in Japan. See pages 1212-1213 supra.

   Plaintiffs have taken no depositions of anyone who is familiar with this document, anyone who was connected with the Market Stabilization Council, or anyone who attended meetings of that group. Because the plaintiffs have preferred to argue from unilluminated "bits and pieces," what we have is a mere piece of paper instead of a meaningful document. In terms of the principles enunciated in the Japanese Materials Evidentiary Opinion, plaintiffs have offered nothing which would establish the Nine Essential Points as an admission or as a business record, or which would justify its receipt under the residual hearsay exception. This includes Melco document 20404 submitted to the court after the summary judgment argument by letter of October 20, 1980.

  However, even assuming that the document containing the Nine Essential Points could be admitted into evidence against certain of the defendants, it would be of no probative weight, for it has nothing whatever to do with export matters. It also could not be used to show "war-chesting," for two reasons: (1) there is nothing in the record to show that any of its provisions were ever agreed to or, if so, were carried out, *fn185" and (2) it appears on its face to concern, at most, resale price maintenance at the retail level and that does not implicate any increase in the profits of the manufacturers. We add that, as appears from documents reflecting activities of the groups involved in the Six Company Case, see discussion infra, resale price maintenance was a vehicle to protect the economic viability of the retail outlets of the manufacturers. A price maintenance policy which would protect retailers from cutthroat competition, thus keeping their own profit margins up, would not aid the manufacturers of the goods. Indeed, the protection of the retailer and increase in the retailer's profit margins would be at the expense of the manufacturer, and that would be inconsistent with the war-chesting theory. While, to be sure, the retailer is an important part of the distribution chain, the mere existence of the Nine Essential Points of Implementation does not suggest that the manufacturers were charging high prices as a part of a high price/war-chesting conspiracy.

  In addition to the foregoing deficiencies, plaintiffs have made no effort whatever to show that prices of CEP's in Japan went up or failed to go down or were stabilized or were in any other way affected by the activities of the Market Stabilization Council or the provisions of the Nine Essential Points. Even more important, plaintiffs have made no effort whatever to show that the profits of any Japanese company regarding consumer electronic products were greater following announcement of the Nine Essential Points than prior thereto. Were plaintiffs to put the Nine Essential Points before the jury, they would not establish any facts helpful to plaintiffs' case. *fn186"

  Plaintiffs allege that during the period between the 1957 JFTC proceedings and the origination of the groups discussed at such length in connection with the Six Company Case, infra, a group known as the Four Associations Conference engaged in conspiratorial activity; hence we consider this group before turning to the Six Company Case. Several of the defendants belonged to the Four Associations Conference; in plaintiffs' submission, it arose in response to the JFTC's surveillance of the CEP industry. However, we have canvassed the documentary references in the FPS to see if we could find any support for plaintiffs' allegations. We find none. *fn187"

  We could have ignored the Four Associations Conference.187A We mention it only because of the approach which the plaintiffs have taken in connection with that group, and because that approach is endemic, i. e., plaintiffs spend an enormous amount of time in their FPS demonstrating how individuals who attended meetings of one group also attended meetings of other groups. If, of course, one starts with the presumption of an overall conspiracy, such facts will plainly extend the conspiratorial skein. Otherwise we fail to see how that proves anything in the absence of evidence as to the activities of the groups.

  We have now concluded our review of the many facets of the activities of certain groups and associations in Japan. However, the voluminous "evidence" adduced by plaintiffs amounts to nothing. On the arguendo assumption that there is some evidence of conspiratorial activity in Japan, we turn to an analysis of plaintiffs' "connection" documents.

  H. The "Connection" Documents

  In a variation on the export reference theme, plaintiffs have alleged that the existence of an export conspiracy is demonstrated by a showing that Japanese executives engaged in discussions of the relationship between the home and export markets. They have advanced this theme through a series of what they dub "connection documents," which we take up at this juncture. *fn188" The notion of "connection" documents was coined by plaintiffs but has also been used by defendants. The parties have used the term "connection" variously to refer to: (1) a relationship between home market and export prices; (2) a relationship between home market and export sales and profits; (3) a relationship between "domestic" and "export" groups; and (4) efforts to conceal from MITI and/or U.S. Customs either the extent of the disparity between home market and U.S. prices or the fact that sales in the U.S., by virtue of rebates, were below the check price reported to MITI and to U.S. Customs. The proffered entries give the plaintiffs no comfort.

  We start with Yajima's diary, which includes a 1966 entry which suggests that the JFTC asked Toshiba to explain the price difference between its domestic and export TV prices. A subsequent entry in the diary, which does not purport to be the record of any meeting, would appear to be Yajima's analysis of the cost bases for the differences, including a list of various costs not incurred in export sales. A September 6th entry purports to indicate that the issue was raised at the Tenth Day Group meeting. However, the apparent conclusion of the conferees at the meeting was that there was no reason to worry about the lack of any connection between domestic and export prices. *fn189"

   Plaintiffs also cite two "connection" entries during the same time period from the diary of Hitachi's Mr. Yamada. *fn190" The first entry is:


  (footnote omitted). One would need a crystal ball to divine what this entry means. The Twentieth Day or Hibiya Group is reputed to have dealt with export matters, and perhaps it could be inferred from this entry that someone (perhaps a Sanyo employee, but that is by no means clear) may have expressed some thoughts concerning check prices at a meeting of the Palace Group, which allegedly was a "domestic" group. That is only speculative, but even if it were true, such a fact would hardly be probative of the existence of an agreement to coordinate domestic and export prices or of any other conduct contrary to the Sherman Act.

  The second entry, also referencing the Twentieth Day Group, states:


  (footnote omitted). This entry is even more cryptic than the one cited above, and we cannot permit the inference to be drawn therefrom of the existence of any conspiracy involving domestic and export prices.

  Turning to JFTC testimony, which we have held admissible against the defendants in the Six Company Case, we find plaintiffs' position no better served. Thus, Mr. Fujio of Matsushita was asked to explain the difference between Matsushita's domestic and export prices:


Said trial examiner: From what you have said, I understand that you are exporting a large quantity to America. How about the prices (in America) as compared with domestic prices?


Said Witness: The nominal price changes. (The price of televisions which we export to America) is the price at which we deliver the TV at the port of Kobe, that is, the CIF price, the price at which we deliver (the commodity) at the Port Kobe is the so-called export price. Then, the importers pay the transportation expenses of shipping (the commodity) and importing (it) by paying import taxes and after making some profit they deliver (it) to the dealers. The selling price is generally balanced with the normal price in Japan. The reason being that they pay all expenses. The manufacturer's export price (expenses) end at the time when the commodity is delivered to the Port of Kobe. However, in Japan, we must advertise the commodity, and do other things as well. That is how we end up with the price I have mentioned. Various things are added to the price at which (the commodity) is delivered at Kobe, and these are paid by them. This is why the price on the American markets is balanced with the price in Japan.

  (emphasis added) (footnote omitted). This testimony does not support the conclusion that there was an export conspiracy; rather it accounts for or harmonizes differences between domestic and export prices. *fn191"

   There being no direct evidence of an export conspiracy or of any connection between import and export prices anywhere in this voluminous record, plaintiffs have turned to other devices to attempt to establish that connection. They have contended that an inference of an export conspiracy can be drawn from documents which establish that some of the individuals who attended meetings at which domestic sales were discussed also allegedly attended meetings at which exports were discussed. Accordingly, they proffer a chart listing a number of persons whom they contend attended both domestic and export meetings. As we have explained, the existence of meetings alone without some direct evidence of what occurred at those meetings does not lead to an inference of antitrust violation, and we fail to see how nothing becomes something because a person attended several meetings.

  Plaintiffs also contend that concealment of the (alleged) price disparity between the home and export markets gives rise to an inference of concerted action. This claim is advanced principally by means of the oft-cited Japan Victor document, which we held inadmissible in the Japanese Materials Evidentiary Opinion at 1303-1309. Of course, even if there had been such concealment, and if the Japan Victor document in fact tended to establish that concealment, it would not be evidence of the conspiracy pleaded by plaintiffs, because concealment of the price disparity would be at least as consistent with the concealer's self-interest (in seeking to avoid detection for MITI or U.S. Customs' violations) as with conspiracy.

  Plaintiffs introduced a number of additional "connection" documents at the pretrial evidentiary hearings, and we take these up in the order of submission. DSS 101, dated December 11, 1965, is a one-page chart entitled "itemized minutes of the October 10 meeting of the presidents of sales companies from all over Japan." It purports to relate to a meeting at which MEI's "new sales system" was discussed with MEI's distributors. The pertinent part reads as follows:


  Despite evidentiary challenge, plaintiffs have laid no foundation for admissibility of this document over hearsay objection, *fn192" nor have they laid foundation to establish it as an admission of MEI. The inferences to be drawn from the document are totally speculative. We can only guess that it means to say that domestic sales were the "foundation" for export sales. The words, moreover, are not those of MEI's Vice President, but rather of an unknown recorder who may or may not have had first-hand knowledge of what was said.

  Plaintiffs speculate that this is an admission that profits earned in the domestic market were used to underwrite sales to the U.S. However, given the fact that the document purportedly reflects a speech of "greetings" to a meeting of domestic sales managers, the equally if not more logical inference would be that the speaker was praising these managers by telling them that Matsushita's competitive ability stems from its domestic market share. Plaintiffs' inference that the Vice President was in actuality describing a secret conspiracy to the assembled managers is a surmise typical of plaintiffs' approach to this case. *fn193"

  DSS 102, another alleged "connection document," is an excerpt from the testimony of Mr. Saeki of MEI in the JFTC Matsushita Resale Price Maintenance case. This testimony did not address exports at all. Rather, it discussed MEI's domestic "new sales system," which was at issue in that case. DSS 103 purports to be a "notice of regular meetings for September, 1966." It lists for September 1, 1966 a Market Stabilization Council meeting for 10:00-11:30 and a Twentieth Day Group meeting for 11:30-12:00. Since the Market Stabilization Council was a "domestic" group and the Twentieth Day Group an "export group," DSS 103 is proffered as evidence of coordination between domestic and export activities. However, the document does not tend to prove such coordination. Moreover, its admissibility has been challenged and it is inadmissible under the standards set forth in the Japanese Materials Evidentiary Opinion. We do not know who prepared this document or anything about the circumstances of its preparation and, in the absence of depositions, we do not know whether the meetings noted therein actually took place, or, if they did take place, what transpired.

  DSS 104 is a page from the diary of Mr. Kozukue of Sanyo, which says only that a meeting of some "20th Day Group" took place on May 20, 1965. It appears in the FPS only in Appendix B, the "calendar" of "conspiratorial meetings." It is as inadmissible as the other diaries in this case, because there is no evidence to establish it as a business record or as an admission or otherwise to justify its admissibility. Furthermore, plaintiffs do not claim that Mr. Kozukue was a member of the 20th Day Group relating to CEP's (see FPS Exhibit A at 473-74); therefore, if this document had reflected a meeting of this group, it could not be based on personal knowledge. Moreover, the entry is irrelevant because it does not establish any "connection" between the domestic and export markets: it does not even say what happened at this alleged meeting.

  The plaintiffs also offer as "connection documents" several of the oft-cited "Ex. Hall" documents, which were marked as exhibits at the deposition of a Sears, Roebuck executive. The most celebrated among these documents is the so-called "Parson's Meeting Anti-Dumping" memo which describes the manner in which the Japanese manufacturers, or at least Sears' suppliers Toshiba and Sanyo, evaded the Japanese check price system through the rebate scheme. These documents do not show any "connection" between a home market and export conspiracy, in pricing or otherwise, and they do not aid plaintiffs' case for reasons which will be clear in our discussion of the "rebate scheme" in Part VII.L, infra.

  Although plaintiffs have relied heavily on their ability to draw an inference from one conspiracy to another, the existence of a home market conspiracy, assuming arguendo that there was one, is no ground for inferring the existence of an export conspiracy. As we explained in Part VII.F.3, supra, evidence of one alleged conspiracy is not a basis for drawing an inference of the existence of some other conspiracy. See Golf City, Inc. v. Wilson Sporting Goods Co., 555 F.2d 426 (5th Cir. 1977). Thus, in sum, the "connection" documents, separately or together, amount to nothing, and supply no evidence to support plaintiffs' case.

  I. The "Intent" Documents

  We turn next to a group of documents which the plaintiffs have denominated "intent" documents. *fn194" These documents fall into two basic categories. First, plaintiffs proffer the Rationales to the various Manufacturers' Agreements and the JMEA Rules to which the Japanese manufacturing defendants were signatories. Second, they rely upon statements, mostly public statements, of certain executives of the Japanese manufacturing defendants. The Rationales and the statements are interpreted by plaintiffs as clearly evincing a predatory intent to destroy the American CEP industry. Both are said to constitute evidence aliunde from which the existence of a low price export conspiracy among the defendants can be inferred, constituting a basis for the admission of coconspirator declarations. *fn195"

  We address first the Rationales to the various Manufacturers' Agreements and the JMEA Rules. The operative provisions of those documents have been discussed supra, and copies of the initial Manufacturers' Agreement and the initial JMEA Rules, with their Rationales, constitute Appendices A and B, respectively, and are not published. Although the text of the Rationales varied from year to year, the initial Rationales which are included in Appendices A and B are fairly representative of the tone and overall substance of the later versions.

  In plaintiffs' submission, the Rationales demonstrate the defendants' predatory and conspiratorial intent. Plaintiffs place particular emphasis on a relatively small number of excerpts from the Rationales. For instance, they point to an excerpt from the Rationale to the initial Manufacturers' Agreement which states that "attention is now focused upon the exportation of television sets as the new star of the nation's export electronics equipment." This Rationale continues:


We, manufacturers of television sets, on the basis of our confidence in the international growth of the electronics industry and realizing that horizontal division of labor is a growing trend among advanced nations, hereby undertake to consolidate and establish the export system, particularly concerning television sets for the United States on the basic principle of commercial ethics among businessmen, to nurture our market in the United States which is already on its way to growth and to respond to the desires and the industry of that country.

  Plaintiffs contend that the quoted statements are evidence of defendants' intention to acquire a monopoly in the U.S. television market. In plaintiffs' view, any reference to an international "division of labor" is a "euphemism" for the defendants' intention jointly to "capture and share a monopoly of the United States markets." Plaintiffs' PPTM at 95-97.

   Several of the Rationales to subsequent Manufacturers' Agreements also contain the following language:


(W)e must restrain ourselves from being enmeshed in so-called excessive competition and must further strive to establish export order so that we may avoid unnecessary friction with the U.S. industry.

  Plaintiffs contend that the statement is evidence of the defendants' intention to eliminate competition among themselves.

  The plaintiffs also cite several passages from the Rationales to the JMEA Rules. The Rationale to the initial version of the JMEA Rules states:


For the current year, a conservative figure of 530,000 units has been set as the target for exportation to all regions.

  In plaintiffs' submission, this comment demonstrates that the defendants jointly set a target for the volume of their exportation. The same Rationale also includes the following statement:


Thus, the businessmen involved have decided that, acting as one body, they will strive to maintain export order and, furthermore, to aim for steady expansion of exportation. With respect to regions other than the U.S., separate measures shall be devised as needs arise.

  Similar language is contained in the Rationales to subsequent versions of the Rules. In plaintiffs' submission, this language is evidence of the defendants' conspiratorial intent. For the reasons which follow, we disagree.

  The statements which plaintiffs have selectively excerpted from the Rationales must be read in the appropriate context that is, in the context both of the entirety of the Rationales from which they were taken, and of the Agreements and Rules which the Rationales accompany and purport to explain. The overall tenor of the various Rationales is that the Agreements and Rules were intended to provide the means to reduce friction between Japan and its trading partners, principally the United States. For example, the Rationales to the Manufacturers' Agreements for the years 1968 to 1971 all contain the following statements:


(I)n recent years, the protectionist trade movement has been gaining momentum in the United States, the area to which the Agreement applies.


Henceforth, even more than heretofore, we must restrain ourselves from being enmeshed in so-called excessive competition and must strive to establish sound export order and promote proper growth of exportation.

  The phrase "excessive competition" appears to refer to competition between the Japanese and the U.S. manufacturers, and not to competition among the Japanese themselves. The Rationales are thus consistent with the Manufacturers' Agreements which, as we have noted supra, establish minimum prices for products sold for export, while permitting the signatories to sell at any price at or above the minimum level. The establishment of a minimum price is obviously the converse of concerted predatory pricing. While we are aware that on the present motions for summary judgment the plaintiffs are to be given the benefit of all favorable inferences which the law allows, the Rationales and statements therein must be considered in their proper context.

  We summarize our conclusions about the Rationales as follows. First, leaving aside the extent to which the draftsmanship represents the efforts of MITI or of the Japanese manufacturing defendants, *fn196" as well as the question whether the agreements were mandated by MITI, we cannot draw the inference of a low price conspiracy. For even if, as plaintiffs contend in their post-summary judgment argument briefs, the MITI check price was, in fact, a low price, the language of the check price agreements cannot be contorted by plaintiffs' contentions as to the signatories' real intent; it is a minimum price which cannot injure the plaintiffs. Second, the language of the Rationales, even aside from their context, is too general, and susceptible of too many other inferences, to support plaintiffs' proposed interpretation. We turn now to the statements of the executives.

  The first document of this type on which plaintiffs rely is the transcript of the JFTC testimony of Mr. Nishi of Hitachi in which he described the home electric appliance industry as "Japan's heritage" and further stated that now that the export on TV's is firmly established, the Japanese intended to "work at it until TV's become a specialty of Japanese industry." Plaintiffs assert that "specialty" is a euphemism for "monopoly," but we fail to see how this statement can be evidence of a violation of the Sherman Act.

  DSS 111, which plaintiffs proffer as a group of "intent" documents, collects several articles which appeared in the "My Thoughts" column of the JMEA Association News, a trade publication put out periodically by the JMEA. *fn197" The articles are all filled with generalized rhetoric, and are not probative of anything. Assuming their admissibility, we take them up in no particular order. *fn198"

  Sony 605, which is undated, purports to be an essay entitled "Theme for 1970's," by Mr. Furuyabu, identified as Managing Director and Director of Main Trade Department, Sharp Corp. In this article, Mr. Furuyabu is quoted as saying that:


For our industry, there is no other market in the world that can replace the U.S. market. The development of other markets is, of course, to be continued in order to correct the uneven state of distribution; however, further efforts should be required to retain the U.S. market.

  There is no mention of what those "further efforts" to "retain the U.S. market" are to be, or even specific mention of exports of CEP's rather than exports in general. *fn199" There is no indication that Mr. Furuyabu "intended" anything other than to continue to export successfully to the United States, through vigorous competition. That would, of course, be a lawful intent. Indeed, it would run contrary to the spirit of the antitrust laws if we were to hold that it was unlawful for a firm to have as its object the penetration of a market or the increase of its market share. At least it would run contrary to the corporate objectives of Zenith, the lead plaintiff in the case.

  When Walter C. Fisher, Zenith's Executive Vice President and Senior Marketing Executive for close to a quarter century, was asked in his deposition to explain Zenith's market objectives, he replied:


A. I am going to answer this in a way that you are not going to like at all. Because you don't understand marketing men at all.


Q. I accept that.


A. I will tell you what my job objective would be and will be always: it is to get all of the market and then expand it also. (192 A).

  (emphasis added). Mr. Fisher's immediate subordinate, Robert Bowen, Zenith's Vice President of Marketing, expressed an identical sentiment immediately prior to the sale of Motorola's color television business. In a presentation to Zenith's senior management in January, 1974, Bowen stated:


In short, despite the fact that we already dominate console color TV sales, we want even more. (182-84, 188, 392 A.)

  (emphasis added).

  Zenith's desire for "all of the market" was not amorphous. Under oath Mr. Fisher admitted to specifically targeting Motorola and others for elimination from the market and even claimed success in that regard:


Q. On the next paragraph, ... you make the statement, and I quote, in part, "I cannot, in good conscience, at this time project Zenith penetration any higher than the 23 1/2 percent (of the U.S. color television market) shown unless we shake out some of our competitors now in the business." Now, your reference to competitors, are those the competitors that are set forth on Page 64949-75?


A. Yes, sir.


Q. Magnavox, Motorola, Admiral, Sears, G.E., Westinghouse, Philco and others?


A. Yes, sir. Some of those I felt were at the levels of penetration they could attain, and there would be some question of their ability to stay in the market, and there was a shake-out. We didn't shake them out; we shook them into multinational corporations, tremendous. You know what happened : Admiral with Rockwell, Motorola with Matsushita, Magnavox with Phillips (sic ). (193-96, 520-23 A.)

  (emphasis added). Plaintiffs have also invoked a statement from the deposition of Joseph J. Sullivan, a former employee both of Sony and of NUE. Mr. Sullivan testified in 1971 that, in a 1964 conversation, Akio Morita, President of Sony, said: "Sullivan San, militarily we could never defeat the United States ... (b)ut economically we can overcome the United States and become number one in the world."

  These statements of competitive desire to succeed in penetrating a market, even to become "number one," are not redolent of violation of the Sherman Act. Unless one begins with the conclusion that the utterers of such statements are monopolists, the inference of conspiratorial predatory monopolistic intent is the sheerest speculation. It not only is not a violation of the Sherman Act to want to be "number one," but it is quite consistent with the competitive ethic which underlies the act; hence the statements to that effect by executives of the Japanese defendants do not help plaintiffs' case.

  Sony 909 is attributed to Mr. Motoda of Hitachi. This article, entitled "Strategy for Export," states in pertinent part:


The most important thing for us in the future would probably be a wide-range strategy for export.


Further, with respect to "route sales' products, it is, needless to say, most important to establish sales routes; however, it is not enough to think clearly because problems such as what cooperative system should be established among manufacturers, Japanese trading firms and overseas trading firms, whether we should aim for export of finished products or principally for export of parts under technological cooperation, or taking a step further, whether we should go into overseas production by advancing our enterprises, etc., have formed into a disorderly whole. Therefore, we can no longer deal with problems of export and business expansion on an individual basis. Moreover, we cannot expect a widening of the market with a leap unless we create a market by making new products which presently do not exist in the world.

  (emphasis added). Plaintiffs seek to infer from this paragraph and especially from the underscored sentence that the author had an "intent" to conspire about export prices. In our view, the passage does not support such a construction, for the cooperation it suggests has nothing to do with price. Moreover, it is couched in the utmost generality, does not mention any specific product, and purports to be only the "thoughts" of the author, not necessarily the policy of Hitachi. This article does not advance plaintiffs' case one whit.

  Sony 689 was apparently written in 1966, purportedly by a Mr. Tanaka, who is described as Assistant Director of the Foreign Research Section of Melco. The article, entitled "Excessive Competition and Correct Competition," first states that


Domestically, discount sales that have become even a common sales tactic have led to a state of sales competition which is connected to a cumulative increase in losses....

  It further states that the same had been true for exports:


the fact that these (check prices) are even considered to be prices for deductions or rebates is ... the most extreme reality of excessive competition.

  The article continues with the statement that, 10 years previously (i. e., 1956), the Chairman of the EIAJ had stated that export transactions should be made at prices which insured "proper (just) profits" but that "the majority of persons who attended this meeting" (who were not identified)


felt that ... the first priority is to develop the market in some way, even with the expectation of loss.... I think that this was a common idea in those days .... Since then, ten years have passed.

  The article characterizes and speculates about the views and feelings of unidentified third parties, from a period at least a decade prior to the relevant time period in this case, on the basis of second or third level hearsay. The article does not refer to any specific product category, and, since Mr. Tanaka was only the Assistant Director of the Foreign Research Section, is not shown to be a statement made on behalf of Melco. Thus, the article is inadmissible hearsay. But even assuming admissibility, it is simply too amorphous to be probative of predatory intent.

  Sony 705 was purportedly written by Mr. Miyazaki, who is described as a director of the trading department of Fuji Electric, a non-party. The "intent" of a non-party is, of course, irrelevant and the article cannot be an "admission" against any party in this case. Moreover, the content of the statement does not help the plaintiffs.

  We have referred above to plaintiffs' reliance upon an "essay" by K. Matsushita entitled "Toward the Year of Restored Business By Overcoming the Slump" as evidence that K. Matsushita "explained to the consumer electronics products industry in Japan that competition among rival companies must not be permitted." While plaintiffs have tried to generalize from this document, it is plain that it says nothing about any intent to restrain competition in exports. Indeed, agreements to restrict capacity would drive prices up and would therefore be inconsistent with any claim that defendants were engaged in a conspiracy to flood the U.S. market with low-price goods.

  Plaintiffs also cite (at p. 7923 of the FPS) to a portion of the document which states:


Therefore, some say that we would be more successful if we would narrow down the scope of our business and concentrate on one product line on an international scale.

  This statement is apparently argued to be evidence that defendants intended to concentrate on CEP's and create a worldwide monopoly. However, that is not what the document says. Nor is there identification of which companies are implicated by the "some say." This document thus does not help plaintiffs' case.

  SC 555-56 is entitled "My Opinions at this Beginning of the Year," from the January 1969 issue of the EIAJ publication "Denshi," purportedly written by Masaharu Matsushita, President of MEI. This document contains the following statement:


In any event, in order to deal with the waves of a floating international economy and to concentrate our efforts on export, which can be called the driving force of economic development for our country, it is necessary first of all to set up as a basic premise the establishment of order in the industry by means of voluntary cooperation and solidarity, and then implement it.

  This document does not support plaintiffs' conspiracy theory for the same reasons, explained at pp. 1231-1232 supra, that the Rationales do not support it.

  Plaintiffs also cite a number of internal corporate (unauthenticated hearsay) documents which reflect an interest on the part of individual defendants in doing business, or increasing their business, in the United States. Some of these documents purport to set goals of increasing market shares, others describe surveys taken or events occurring in the United States, and still others purport to be documents in which investments in, or the establishment of, facilities in the United States are discussed. Obviously, these indications of an individual defendant's intent to compete in the United States do not support any inference of conspiracy; hence, we shall not detail them herein.

  The plaintiffs' supply of meaningless "intent" documents is virtually limitless. At one point, they even cite an article in the Atlantic Monthly. We have spent as much time as we have in discussing these meaningless documents because we believe that fairness requires thoroughness in reviewing plaintiffs' proffers and because we have tried to be respectful of all the plaintiffs' submission. In this instance (as well as in some others) such an attitude has been difficult to maintain because the "intent" documents are so far afield.

  J. Plaintiffs' Allegations of Below Cost Sales

  Plaintiffs have offered Dr. DePodwin's expert testimony that four of the defendants sold their products in the U.S. at prices below their costs. In our Expert Testimony Opinion at 1352-1363, we ruled this evidence inadmissible because, inter alia, it was a mathematical construction based upon explicit assumptions which were contradicted by the record, and because the construction was based upon unreliable average prices by screen size. *fn200"

  Under these circumstances, plaintiffs' argument that the predatory nature of defendants' low price export conspiracy is demonstrated by below cost sales falls of its own weight.

  K. Evidence of International Price Discrimination Between the United States and Japanese Markets

  As an element of their purported proof of conspiracy, the plaintiffs have offered voluminous comparisons of the prices which defendants charged in the United States and in the Japanese markets for allegedly comparable products. We ruled most of these materials inadmissible in our Expert Testimony Opinion. *fn201" However, because of their pivotal role in plaintiffs' case, we shall assume arguendo their admissibility and thereupon consider them.

  Plaintiffs' price comparisons are based on technical comparisons and model-by-model "matchups" constructed by their technical experts Walter Lukas, Karl Horn, and Vito Brugliera. The matchups and price comparisons are described more fully in our opinion granting summary judgment on the plaintiffs' claims under the 1916 Antidumping Act, 494 F. Supp. 1190, 1203-04 (E.D.Pa.1980), appeal pending, No. 80-2080 (3d Cir.). In that opinion, we held that the technical differences between television receivers and most other consumer electronic products which defendants marketed in the United States and those which they marketed in Japan precluded comparison of those products under the Antidumping Act of 1916, 15 U.S.C. § 72. In the Expert Testimony Opinion at 1354, however, we held that the issue of comparability under the Sherman Act differs from that under the Antidumping Act, and that the products need not be of "like grade and quality," but need only be "sufficiently similar to make the comparison of their prices logically probative of parallel pricing." Id.

  In plaintiffs' submission, all of their price comparisons, from whatever methodology derived, show that all of the Japanese manufacturing defendants sold comparable products at lower prices in the U.S. than in Japan. The price differential, in plaintiffs' submission, sometimes exceeded 100% of the U.S. price. The plaintiffs do not contend that the defendants each maintained the same price differential between the two national markets, either in absolute terms or as a percentage of the sales price. Indeed, such a contention plainly would not be supported by their calculations. However, plaintiffs contend that their evidence that each defendant maintained some price differential between the U.S. and Japan, and sold at a lower price in the U.S., is evidence of parallel business conduct which supports an inference of conspiracy under § 1 of the Sherman Act. We disagree.

  Under the principles governing the inference of conspiracy from evidence of parallel business conduct, explained in Part VI.D.4, supra, plaintiffs' evidence of price differentials between the U.S. and Japanese markets is not probative of the conspiracy alleged in their complaint. Those principles provide that an inference of conspiracy from parallel business conduct is not permissible as a matter of law unless the plaintiffs can show that the defendants' behavior made the inference of rational independent choice less attractive than that of concerted action, Bogosian v. Gulf Oil Corp., 561 F.2d 434 (3d Cir. 1977), cert. denied, 434 U.S. 1086, 98 S. Ct. 1280, 55 L. Ed. 2d 791 (1978). Such a showing generally requires that plaintiffs show the defendants had motivation to enter an anticompetitive agreement and that the behavior was truly interdependent, i. e., that it was inconsistent with the defendants' own independent economic interests. Venzie Corp. v. United States Mineral Products Co., 521 F.2d 1309 (3d Cir. 1975). We will assume for present purposes that plaintiffs have come forward with sufficient evidence of consciously parallel business behavior to raise a genuine issue of material fact precluding the grant of summary judgment on the parallel nature of defendants' conduct and on the defendants' consciousness of one another's behavior. *fn202" Nevertheless, plaintiffs have failed to raise a genuine issue of material fact as to the interdependence of the defendants' alleged price differentials between the U.S. and Japanese markets.

  The fact of the matter is that the plaintiffs have never articulated a credible explanation of their theory of the interdependence of the defendants' allegedly parallel pricing. Their purported discussions of that interdependence are best characterized as misdirected, diffused, lacking in coherence, and even focusing on irrelevant matters, such as the defendants' establishment of production facilities in third countries like Korea and Taiwan and alleged violations of U.S. Customs laws by means of the double-invoicing system described infra. See, e.g., Plaintiffs' Supplemental Post-Argument Memorandum in Opposition to Defendants' Motions for Summary Judgment, at 210-27 (Sept. 22, 1980). *fn203"

  The essence of the plaintiffs' charges with respect to pricing is, as we have noted above, that defendants entered a conspiracy to sell television receivers and other consumer electronic products in the United States market at low prices necessary "to get the available business." *fn204" The fatal flaw in plaintiffs' approach to this indispensible and elemental ingredient of an alleged conspiracy is that it describes normal business conduct. No defendant, or any other businessman for that matter, would have any motivation for entering a conspiracy to sell at low prices because one does not need a conspiracy to sell at low prices. One can do that by oneself and would not in any way be aided by a conspiracy; to do so is more consistent with competition than with conspiracy. Thus, plaintiffs' theory fails for want of a logical predicate. Indeed, plaintiffs' entire theory is inherently implausible. Unlike parallel raising of prices, parallel lowering of prices without more (and plaintiffs have adduced no evidence of either parallel reduction of prices or anything more) does not point to conspiracy. Lowering of prices is what a reasonable seller is likely to do to avoid a loss in sales. A parallel price reduction ordinarily reflects a series of market-compelled individual responses, not agreement. However, in plaintiffs' universe, circumstantial evidence of competition becomes evidence of conspiracy. *fn204"

  Plaintiffs' notion of "artificially low prices" makes no sense, especially since it includes prices which are at the highest price level of the U.S. market, see discussion infra respecting defendant Sony. To say that what makes the price artificially low is the mere fact that it will get the sale would mean that every price at which a sale into the United States was ever made of any Japanese CEP was "artificially low" and "predatory," because if it were not, it would not have secured a sale.

  To extend the analysis a bit further, we observe that companies do not need to conspire to sell at prices "necessary to get the sale." Indeed, when competitors make their investment, marketing, and pricing decisions, they necessarily assume that the competition "will price to get the business." While the result of such practices may be a depression of prices in the market, it is the kind of price depressing effect which flows from normal competitive pricing behavior and is precisely that which the Sherman Act is intended to secure, not condemn. Indeed, if there had been such an express agreement, the mere fact that the word "price" was mentioned would not render any such agreement in violation of the Sherman Act in the absence of an agreement upon particular prices or price levels. See discussion at Part VI.A.(2), supra.

  Plaintiffs' apparent inability to come up with a theory of the interdependence of the price differentials is not surprising for still other reasons. It is undisputed that the Japanese defendants are well-established in Japan; plaintiffs themselves have repeatedly pointed out that the Japanese manufacturing defendants collectively control more than 90% of the domestic market for television receivers in Japan. In contrast, during the pertinent times, the defendants were new entrants in the U.S. market, with unknown brand names and with no goodwill or business reputations in the United States. Thus, the defendants individually faced similar circumstances as new entrants in the U.S. market and, therefore, could be expected unilaterally to adopt similar pricing strategies to attract customers and gain consumer acceptance in this country. Such a reasonable response to the common business problems presented by the United States market for consumer electronic products to foreign entrants does not support an inference of conspiracy. As noted by the Ninth Circuit in Independent Iron Works, Inc. v. United States Steel Corp., 322 F.2d 656, 661 (9th Cir.), cert. denied, 375 U.S. 922, 84 S. Ct. 267, 11 L. Ed. 2d 165 (1963):


Like businesses are generally conducted alike and, as the trial judge correctly stated, similarity in operations lacks probative significance unless present "under circumstances which logically suggest joint agreement as distinguished from individual action."

   Another factor ignored by plaintiffs, though equally destructive of their theory of interdependence, is the difference in the market conditions (or, in terms of economic theory, the level and elasticity of the demand curve) between the U.S. and Japanese markets. Charging lower prices in the United States than they charged for similar CEPs in Japan would in no way undermine the unilateral character of defendants' conduct. Price differences between two markets where competitive conditions, income and spending patterns, and products differ are to be expected and, therefore, do not support an inference that the lower price is the result of an agreement. *fn205" Indeed, in the one case which the parties were able to locate in which evidence of geographic price discrimination was offered as proof of conspiratorial behavior, Vanco Beverage, Inc. v. Falls City Industries, Inc., 1980-2 Trade Cas. P 63,357, (S.D.Ind.1980), the court rejected the evidence as insufficient to support allegations of a conspiracy in restraint of trade. Id. at p. 75,820. *fn206"

  It is, of course, irrelevant to our present inquiry that price differentials between the U.S. and Japanese markets may have: (1) rendered the defendants liable for antidumping duties under the Antidumping Act of 1921, a nonantitrust, protectionist statute; (2) may have violated the Manufacturers' Agreements and JMEA Rules in contravention of Japanese law; (3) may have been accompanied by violations of U.S. Customs law as a result of the double invoicing system; or (4) may have violated the Antidumping Act of 1916 which forms the basis of distinct counts of the plaintiffs' complaints. The question we are considering is only whether or not the price differentials give rise to an inference of conspiracy in violation of the Sherman Act, and not whether the price differentials violate some other law, American or Japanese, which does not require proof of collusion.

  The plaintiffs claim that the violation of other laws demonstrates the interdependence of defendants' pricing behavior, but we find no logical basis for this claim. Although we, of course, do not condone violations of any law, it is obvious that under certain circumstances, a firm might find violating a price-control law to be in its own independent economic interests. In an analogous context, the Third Circuit rejected a claim that a conspiracy may be inferred from violations of a price control law by means of allegedly illegal rebates. Knuth v. Erie-Crawford Dairy Cooperative Ass'n, 463 F.2d 470, 476 (3d Cir. 1972) (Gibbons, J.), cert. denied, 410 U.S. 913, 93 S. Ct. 966, 35 L. Ed. 2d 278 (1973). See discussion at Part VI.A.(7), supra and VII.L., infra. Thus, in the absence of any elucidation by the plaintiffs of a link between the alleged violations of other laws and the interdependence of the defendants' pricing, those alleged violations are not evidence of conspiracy.

  Finally, plaintiffs contend that the interdependence of the defendants' price differentials is supported by evidence that the Japanese defendants' U.S. subsidiaries sustained losses on their operations in the U.S. *fn207" Such evidence does not provide logical support for an inference of conspiracy. Although Venzie requires a showing that the defendants' conduct was "in contradiction of their own economic interests," 521 F.2d at 1314, the mere fact that some of the defendants lost money in the initial years of their entry into the U.S. market, or that they lost money on particular transactions, does not meet that test. A company's long-range independent economic interests may require it to operate at a loss for several years in order to become established in a new market. Certainly, this might have been true of the defendants as new entrants in the U.S. consumer electronics market. The particular documents cited by the plaintiffs to show that the defendants sustained losses are entirely consistent with the conclusion that the losses were incurred by the defendants in the course of gaining a foothold in the U.S. market and in no way indicate anything other than legitimate independent competitive activity. Thus, we conclude that plaintiffs' putative evidence of losses sustained by the defendants in attempting to enter the U.S. market is insufficient, as a matter of law, to support an inference of conspiracy.

  This discussion presages the final point which must be made with respect to plaintiffs' efforts to infer a conspiracy from alleged international price discrimination. Even if there were evidence that defendants had incurred losses in a concerted effort to take over the U.S. CEP market, plaintiffs' export conspiracy claim makes no sense in the absence of evidence of: (1) an increase in prices to reap "monopoly" profits after penetration of the U.S. market had been achieved; and (2) an administrative mechanism capable of effectively managing or policing the alleged joint strategy or of a means to share profits or recoup losses. Turning to the latter point first, we note that even plaintiffs' own "experts" have stated that an effective conspiracy of this type would have included as one of its key elements "some administrative mechanism capable of effectively managing and enforcing the joint strategy, such that the rewards of monopoly and U.S. market share could be equitably shared among the co-conspirators." *fn208" Yet, no such profit and loss sharing mechanism by defendants is even alleged by plaintiffs in their FPS, and no evidence thereof is offered. *fn209" This lacuna is magnified upon recollection that the Japanese manufacturing defendants are supposedly joined in the conspiracy by many if not most of the other CEP manufacturers in Japan, as well as by dozens of alleged coconspirators of other nationalities as well.

  More importantly, plaintiffs' allegation that defendants deliberately sustained losses in the United States in the hopes of taking over the U.S. CEP market and charging "monopoly" prices at a later date simply makes no sense in light of the evidence. There is no evidence that the defendants, after having achieved a foothold in the United States market, ever raised their prices to recoup their losses, or earned monopoly profits. But, even the notion that this might happen makes no sense, for the defendants, as new entrants with relatively small market shares, could not rationally have hoped to recoup sustained losses in the United States in view of both the dominant market positions already held by RCA and Zenith (maintained, according to the record, to this day) and the ability of European manufacturers, other Far East companies, and major American firms swiftly to increase their United States CEP sales if higher "monopoly" prices were ever charged. We also note in this regard that there is no evidence of high entry costs or barriers in the U.S. CEP manufacturing and distribution industry.

  In sum, plaintiffs' purported evidence of international price discrimination amounts to nothing. We turn to another of the major components of plaintiffs' case, the alleged collusive predatory export rebate scheme.

  L. Plaintiff's Evidence of the Operation of the "Predatory Export Rebate System for Collusive Concealment of Dumping"

  1. Elements of the Rebate Scheme

  Plaintiffs' description of the operation of what they describe as a "predatory export rebate system for the collusive concealment of dumping" proceeds in contrapuntal style. Referencing the Manufacturers' Agreements, plaintiffs first claim to have demonstrated that the Japanese manufacturing defendants and their coconspirators, as a means of coordinating their concerted export drive, applied for and attained an exemption from the Japanese Antimonopoly Law to meet together to discuss and establish minimum or "check" price levels for television receivers to be exported to the United States, for the purpose of protecting and preventing the destruction and disruption of the United States TV manufacturing industry (although in reality they sought to destroy that industry). Then, in plaintiffs' submission, defendants and their coconspirators proceeded "commonly and systematically" to sell and export TV receivers to customers in the United States and to market TV receivers in the United States through subsidiaries created for that purpose at prices far below the "check prices" (also referred to by plaintiffs as "reference" or "benchmark" price levels), as well as below U.S. domestic price levels.

  Plaintiffs contend that defendants' representatives met and negotiated with their registered U.S. private label and original equipment manufacturer (OEM) customers and that, "with the knowledge and adherence of their confederates to the scheme, agreed upon export prices far below the so-called check prices sufficiently low to obtain the business and to depress prices in the United States to unremunerative levels." Plaintiffs allege that in order to conceal the actual export prices in these transactions, the invoices, purchase orders, letters of credit, export validation forms, shipping documents, United States Customs' invoices, and other formal documents reflecting the price at which the goods were being exported from Japan and imported into the United States were "systematically falsified" by the entry and declaration of erroneous prices, in most instances higher than the prices actually agreed upon between the Japanese suppliers and their customers in the United States. The difference between the fictitious invoice prices and the concealed actual prices is said to have been secretly rebated or otherwise returned to the United States importers and customers.

  Plaintiffs further allege that the Japanese manufacturers, trading companies, subsidiaries, and certain customers: (1) deliberately established and maintained double sets of books for their television transactions involving the United States; (2) purged purchase orders and invoices reflecting actual pricing; and (3) substituted purchase orders and invoices setting forth false information for the true documents for the purpose of frustrating and evading investigations, litigation, or inquiries from the U.S. Bureau of Customs, the United States Treasury Department, and other United States law enforcement agencies. Alternatively, plaintiffs allege that certain manufacturers, trading companies, and importers of Japanese television receivers adopted the deliberate policy of refraining from keeping records reflecting the difference between the fictitious prices and the actual prices or records reflecting the receipt of the clandestine payments, allowances, and adjustments therefor.

  Plaintiffs particularize their allegations as follows:


Under the scheme of fraudulent concealment employed by defendants and their confederates to avoid detection, United States purchasers of Japanese television receivers lodged letters of credit in Japan for the value of the television receivers calculated at the higher, fictitious prices, instead of the actual, negotiated prices. The export transactions, therefore, created an overpayment or balance in the hands of the Japanese manufacturer or vendor which was reimbursed to the purchaser. This balance, equal to the difference between the "invoice price" or "camouflaged price" and the "actual price," was referred to by a variety of terms. Since the "actual" or negotiated price per unit was often several dollars below the "invoice price" or the "check price," the aggregate difference between the "check price" and "actual price" for an entire transaction was usually substantial. Because of the size of the sums of money to be rebated to the customer, a variety of devious and illegal means were employed to rebate the overpayments to the United States customers.

  Plaintiffs enumerate the following labels, euphemisms, or devices for rebates of the difference between the check price and the actual negotiated contract price:


1. "difference money"


2. "behind-the-scenes money"


3. "check price balance" or "c. p. balance"


4. "loyalty discount"


5. "excess inspection," "100% inspection," "inspection fees" or other "inspection" costs


6. credits or payments for "rework" or "service" charges


7. credits offset against tooling costs


8. travel expenses


9. entertainment


10. "free goods"


11. "replacement" allowances for allegedly "defective" products or "excessive warranty cost"


12. free spare parts


13. "warehousing"


14. "commissions" or "sales commissions"


15. deposits in customers' yen accounts in Japan


16. "compensation" for purchase by the Japanese vendor of valueless "market research" from the customer


17. credits toward the purchase price of other products, including a system known as "over-and-under" or "over-and-under billing," under which the difference between the higher "invoice" price and the "actual" price is credited toward and deducted from the actual purchase price of another product and, in this manner, refunded to the purchaser


18. "advertising allowance"


19. "usance" or "usance interest"


20. "refunds"


21. "rebate" or "rebate check"


22. "Sharp money" or "Sharp Fund"


23. "adjustments to invoice prices"


24. travelers checks


25. telegraphic transfers through Swiss, German, Hong Kong, and other foreign banks.

  The plaintiffs then proceed to describe in some 2,000 pages of their FPS the details of the operation of the "rebate scheme." This segment of the FPS is bottomed largely upon depositions taken by plaintiffs of American importers and documents produced in discovery, mostly by American importers that supported the transactions between the importers and the various Japanese manufacturing defendants. Many of the documents submitted by plaintiffs during the in limine hearings were of this genre.

  Notwithstanding the length of the FPS narration, we shall not attempt to describe in replete detail plaintiffs' specific allegations as to the alleged scheme. *fn210" That is because, assuming admissibility of the various documents, *fn211" the defendants, or at least most of them, concede with respect to U.S. import transactions that: (1) the price listed on the invoice for the various CEP's at issue was the check price reported to MITI; (2) the actual or negotiated price per unit was often several dollars below the invoice price; and (3) the aggregate difference between the check price and the actual price was rebated by a variety of means, i. e., one of these listed by the plaintiffs at p. 1242, supra. *fn212" Moreover, it is not in dispute that the United States purchasers would lodge letters of credit in Japan for the value of the television receivers calculated at the higher prices, instead of at the actual negotiated prices. *fn213" There is thus no genuine issue of fact on these matters, rendering extended discussion wasteful. Whether the facts are material is quite another question, one which will be addressed infra. In the meantime, a few additional words about the rebate scheme as it is fleshed out in the record will be helpful to the discussion which ultimately follows.

  Plaintiffs themselves admit that there was no consistent pattern to the "predatory export rebate conspiracy." They allege that well over a dozen techniques were employed and that still more were considered.213A For example, Sanyo employed a "loyalty discount" scheme in sales to Sears, which rewarded Sears with a periodic refund check for purchasing a certain number of television receivers during the contract period. Toshiba and Sears are said to have engaged in "overbilling and underbilling between television receiver models." According to plaintiff, Toshiba over-billed Sears on models initially priced below the check price and underbilled Sears on models initially priced above the check price so that the differences would "wash." Plaintiffs claim that Hitachi paid GE rebates in the guise of payments for "worthless" technical information. A proposed rebate scheme between Sharp and Motorola allegedly involved consideration of the payment of "engineering fees," "inspection charges," "refunds in other products," and selling through three different possible intermediaries. *fn214"

  Our emphasis heretofore has been on documents. Rebating, however, is the one area of the case in which plaintiffs have proceeded extensively by way of depositions. Another reason (in addition to defendants' concessions about the payment of rebates) why we need not engage in an extensive description of the rebate documents is that the plaintiffs have, by depositions (e.g., the deposition of Mr. Brennan of Sears), come forward with sufficient evidence of the existence of the rebate scheme to create a factual issue as to its existence. If the mere existence of the scheme would defeat summary judgment, we would be obliged to deny defendants' motion.

  Plaintiffs' principal emphases in their description of the rebate scheme are upon its clandestine nature and the facts that it was pervaded by attempts of the exporter and the importer to conceal: (1) from MITI the fact that there were sales below check price and (2) from U.S. Customs authorities the fact that the price reported to Customs was not the true sales price. Of course, the higher price reported to Customs would result in a higher normal duty. However, in plaintiffs' submission, the defendants and their coconspirators feared that discovery of the true price for the goods would lead to the assessment of dumping duties under the 1921 Antidumping Act, which would be even higher than the elevated normal duty; hence, the "cover-up." Plaintiffs thus expend many pages of their FPS relating excerpts from depositions and from documents which support their contention that various defendants attempted to conceal from MITI and from U.S. Customs the actual prices at which CEP's were being bought. Again, although we could write at length on these points, we shall refrain from doing so, because we agree that there is evidence of the concealment of the rebate scheme from MITI or from U.S. Customs by at least some of the defendants. We will therefore assume for purposes of summary judgment that many of the defendants concealed the rebating practices.

  The existence of the "rebate scheme" is not in and of itself sufficient to create a genuine issue of material fact, however. For it to create a genuine issue what the plaintiffs must show is some evidence, direct or circumstantial, that the rebating was done in concert, in pursuance of collusive activity, and in such a manner as to support plaintiffs' claim of a predatory export conspiracy. Plaintiffs have sought to establish this essential portion of their case in two ways. First, they contend in their FPS that "through continuous meetings among themselves, including meetings at the highest levels, the defendants and their affiliates coordinated their export pricing." Second, plaintiffs approach the matter indirectly or circumstantially by contending that:


the Japanese defendants and their subsidiaries and certain favored large importers had full knowledge of the rebating system and accompanying "double-pricing" devices and patterns of customs fraud, and that with full knowledge that other defendants and co-conspirators were giving their adherence to and accepting the benefits of this unlawful system of export trade, each defendant and each co-conspirator gave its adherence to and participated in the combination and conspiracy.

  We turn now to plaintiffs' evidence of collusive rebate activity. *fn215"

  2. Alleged Collusion in the Export Rebate System

  The plaintiffs have made conclusory allegations in their FPS that through meetings of their executives at every level of management, defendants and their subsidiaries and affiliates coordinated their export pricing. More specifically, the plaintiffs have alleged that the "dumping price levels" at which export sales were made were established in concert by the Japanese manufacturing defendants, their trading companies, and coconspirators as part of a "joint export system devised and implemented by them and related to certain common reference price levels, known as check prices or "MITI prices.' " *fn216" However, we have reviewed every document which has been cited by the plaintiffs in support of such allegations and find no evidence to support them.

  As we have noted, in addition to claiming that there was overt agreement, plaintiffs rely upon the assertion that defendants' rebates were "parallel," "interdependent," and that defendants had "knowledge" of each other's rebates. *fn217" All of this, they claim, adds up to "interdependent conscious parallelism," which allegedly supports an inference of conspiracy. In a variation on this theme, plaintiffs assert that liability may be predicated on the fact that each of the defendants and importers, with knowledge that the price levels at which products were sold from Japan into the United States were dumping levels, and with knowledge that it was necessary in order to avoid the imposition of dumping duties by the United States Customs Bureau and Treasury Department to conceal the actual prices, and even with knowledge that they were participating in a criminal offense, nonetheless participated in this scheme.

  Plaintiffs' evidence in support of their claims of interdependent and conscious parallelism and of defendants' "knowledge" of each other's rebates was reviewed in detail in the in limine hearings and during the summary judgment arguments. Defendants' counsel have represented that in preparation for the summary judgment arguments they reviewed every document cited by the plaintiffs in support of their claim that the rebate scheme was common knowledge among the defendants and that concerted rebate activity could be inferred, including all of plaintiffs' "starred" DSS's, *fn218" all the documents cited for this point in the FPS, all the documents cited in plaintiffs' various briefs and exhibits, and all the documents contained in plaintiffs' supplementary list submitted to the court for in limine consideration. Defendants' counsel summarized the results of their review during the summary judgment argument (PTO 289 at 97-137 and PTO 291 at 260-71), representing that while these documents show that there was general awareness of the existence of rebate practices, they provide no evidence of collusion among the defendants in connection with rebate activity. Our own review confirms that defendants were correct in this conclusion.

  Some of plaintiffs' documents show that U.S. purchasers were aware of rebates being given by more than one manufacturer, that practically every exporter in some manner attempted to bypass the check price system, and that the importers generally were aware of the fact that it was difficult for the Japanese firms to compete by selling at the check price. However, plaintiffs have not developed any facts which demonstrate that information about the amount of rebates was gleaned by Japanese manufacturers from each other. Rather, the evidence shows that the individual defendants learned about their competitors' rebates through their own U.S. purchasers. Moreover, there is significant evidence that the U.S. purchasers who provided the Japanese manufacturers with this information did so in an effort to put pressure on them to lower their prices to meet competition. *fn219" There is also evidence that efforts were made by Japanese manufacturing defendants to prevent the other Japanese manufacturing defendants from learning about their rebate structure. *fn220" Thus, if these documents advanced by plaintiffs are admissible, *fn221" they show that: (1) rebates were paid; (2) they were necessary to enable individual Japanese manufacturers to meet competition; (3) the American importers played the Japanese manufacturing defendants off against one another in order to get the best price; and (4) the defendants sought to keep information about their rebates from one another. This pattern of conduct sounds more in competition than in antitrust conspiracy.

  Plaintiffs rely heavily on allegations of clandestine customs fraud, but it is uncontroverted that there was widespread knowledge at all relevant times of the existence of the practice of reporting the MITI price to U.S. Customs and of consummating the transaction (via a rebate) at a negotiated or actual price less than the reported price. *fn222" Indeed, it was even a matter of public record, as is evident from a reading of the Continental Forwarding cases, see United States v. Continental Forwarding Co., 62 Cust. Ct. 915, 297 F. Supp. 1396 (Cust.Ct.1969), aff'd, 64 Cust. Ct. 838, 311 F. Supp. 956 (Cust.Ct., App.Term 1970), aff'd, 59 C.C.P.A. 178, 463 F.2d 1129 (2d Cir. 1972). That litigation, which began in the early 1960's, raised the question whether certain binoculars imported from Japan should be dutied at the MITI price at which they were entered and appraised, or at the actual contract price, which was below the MITI price by virtue of a rebate paid to the importer. The facts set forth in all of the reported opinions in that litigation, one as early as 1961, make it clear that the whole industry, as well as United States Customs officials, knew of the rebate practice. *fn223" The ultimate holding of the Continental Forwarding cases was that the lower contract price (after the rebate), rather than the higher MITI price, prevailed for Customs purposes. The Continental Forwarding litigation thus demonstrates that the practices which plaintiffs proclaim to have been clandestine were, in fact, widely known.

  In the wake of these observations, it should be plain that knowledge of the existence of the rebating practice does not suggest collusion as to those practices. Moreover, the very divergence of approaches to rebating described above is sufficient in and of itself to suggest conduct consistent with competition, or at least with the exporters' self interest. Additionally, and still more important, the evidence shows that prices at which the various CEPs were sold under the different rebate schemes were very different, that the amounts of the rebates given by individual defendants were different, and hence that the net prices were significantly different. More precisely, plaintiffs' evidence demonstrates that, even during the same year, identical screen size televisions were sold by different sellers to different buyers at different prices involving alleged secret rebates which were also different. *fn224" As we will underscore below in our further discussion of the inferences which are drawable from the rebating practices, these differing prices and rebate amounts are inconsistent with collusion, or at least, they are as consistent with competitive, rational, independent behavior by each individual defendant. *fn225"

  Another approach taken by plaintiffs in an attempt to adduce some evidence of collusiveness in rebate-related export practices lies in their contention about certain meetings which took place in the wake of the U.S. Treasury antidumping investigation. These meetings were attended by executives of and counsel for a number of defendants and their private label customers to whom they had paid rebates and with whom they had apparently engaged in "double invoicing." The conferees apparently discussed the Treasury Department dumping investigation from a number of points of view. Inter alia, they sought information about the investigation and discussed its anatomy, scope, and potential consequences, and appropriate strategies for defending against it. J.C. Penney and Matsushita actually brought lawsuits challenging the Treasury Department's conduct at the dumping investigation involving television receivers from Japan. *fn226" Plaintiffs seek to draw an inference of conspiracy from these discussions and suits. However, as we have seen in our legal discussion, Part VI.A.8, supra, it is impermissible to draw an inference of conspiracy from that fact.

  As the foregoing review demonstrates, there was no consistent pattern to the so-called rebate conspiracy. There were at least 25 different rebating techniques which were considered or employed. Plaintiffs have been unable to adduce any direct evidence as to collusive activity by the defendants with respect to rebates, nor have they cited any facts to support their claim that defendants adopted a common rebating strategy, or that there was any agreement among defendants concerning rebates. Rather, by listing a series of alleged rebating transactions involving individual Japanese defendants for some 2,000 plus pages of the FPS, plaintiffs assert, ipse dixit, that this by itself leads to an inference of conspiratorial behavior. The fact, however, is that plaintiffs' rebating evidence in actuality is at least as consistent with, and actually supports, just the opposite inference that defendants engaged in unilateral conduct which was neither "parallel" nor "interdependent," but rational, independent, and pro-competitive. We take this opportunity to summarize our analysis of what inferences are drawable from the evidence adduced by plaintiffs about the "rebate scheme."

  We start with the proposition that it is illogical to infer joint conduct from disparate behavior. Most of the alleged rebating, according to plaintiffs' submissions, was random and was done by one or two defendants with one or two customers. *fn227" As we have noted above, see n. 214, the number of customers granted the rebates varied greatly, and plaintiffs do not contend that defendants gave rebates to all their customers. Moreover, it is plain that rebating "to get the business" does not meet the Bogosian/Venzie test. It is not against, but rather in one's own self-interest to rebate if doing so obtains the sale.

  We have already rejected, in Part VI.A.7, supra, the notion that secret rebates to get business violate the antitrust laws, see Knuth v. Erie-Crawford Dairy Cooperative Ass'n, supra, and the related notion that concealing such rebates from a governmental organ, such as MITI or U.S. Customs, in an effort to circumvent barriers to competition, can form the basis for an antitrust violation, see Citizens & Southern National Bank, supra. *fn228" Instead, we have noted that such activities are in reality pro-competitive. Accordingly, the probative value of plaintiffs' evidence of secrecy in the rebating practices, without more, is nil.

  Evidence that a customer of one of the defendants informed that defendant of a rebate being offered or granted by another defendant, or even evidence showing that manufacturers and their customers had general knowledge that rebates were available, or that these rebates might cause problems under the 1921 Antidumping Act, is also not a basis for drawing an inference of concerted action. It is commonplace for competitors to learn from customers or potential customers about "deals" being offered by other manufacturers. This is precisely how customers induce price competition between one manufacturer and another. As we have pointed out, there is widespread evidence in the record of this case that this was being done by the American purchasers of Japanese CEP's in an effort to "whipsaw" or induce the Japanese manufacturing defendants, competing among themselves, to give better discounts, rebates, allowances, etc. in order to get the business.

  What plaintiffs must adduce evidence of, but have failed to, is that this "knowledge" was gained through communications between or among the defendants or that it relates to a rebate conspiracy. Moreover, the extremely diverse rebating practices followed by the defendants and the independent self-interest which they had to engage in rebating themselves preclude any inference that there was an agreement concerning the amounts or types of rebates being offered by the defendants. At the very least, the evidence is as consistent with competition as with conspiracy. *fn229"

  The foregoing discussion concentrates on the inferences to be drawn as to the Japanese manufacturing defendants. To complete our discussion, however, it is necessary to consider what inference can be drawn as to MC and MIC, Motorola, and Sears, who were not manufacturers but rather purchasers of Japanese CEP's. Flipping the coin, however, does not alter the result. First, there is no evidence that the rebates paid to Sears follow a pattern similar to that paid to any other importer of Japanese CEP's or, in fact, that Sears' two principal suppliers, Toshiba and Sanyo, acted in parallel fashion in their rebating practices vis-a-vis Sears. Indeed the evidence is to the contrary. There is evidence of only one rebate paid to Motorola, that by Sharp, and there is only questionable evidence of a rebate paid to MC; but there is no evidence of parallel activity in those instances.

  More significantly, it is plainly in the interest of a purchaser to obtain a rebate so as to get the lowest possible price. Although plaintiffs decry the activities of Sears in securing rebates from Sanyo and Toshiba, noting that they made it possible for these companies to compete vigorously with Zenith, it appears to us to be pro-competitive and in Sears' interest for Sears, or any buyer, to attempt to get the best price it can. *fn230"

  M. Plaintiffs' Evidence Concerning the Depletion and Destruction of the United States CEP Industry

  Plaintiffs devote some 131 pages of their FPS to what they describe as "the debilitation and destruction of the United States consumer electronic products industry." They offer this evidence in an attempt to draw an inference therefrom of conspiratorial behavior i. e., an inference of intent and anticompetitive acts from "effects." Plaintiffs' presentation falls into three discrete areas. First, plaintiffs offer a plethora of statistics relative to increases in Japanese imports into the United States, the decline in production of U.S. television receivers, and related matters. Second, plaintiffs proffer certain findings about injury to U.S. industry emanating from administrative proceedings before the United States Treasury Department, the United States Tariff Commission, and the United States International Trade Commission. Third, plaintiffs advance an analysis based upon the notion of "retail price points" in the U.S. market which are alleged to have deteriorated as the result of defendants' activities.

  In the first of these categories, the statistics, plaintiffs have submitted data demonstrating a considerable increase in imports of monochrome and color television receivers from Japan into the United States during times relevant to this case. For instance, U.S. imports of color television receivers from Japan increased from less than 0.7 million units in 1968 to 3.7 million units in 1976. In terms of private label sales, U.S. imports of color television receivers from Japan increased from 192,000 in 1966 to 376,000 in 1970, and total U.S. imports of private label television receivers (monochrome and color) from Japan increased from 758,000 units in 1966 to 1,309,000 units in 1970. In terms of percentages, in 1965 Japan supplied about 10% of the United States consumption of television receivers, compared to 28% in 1970. *fn231"

  Plaintiffs also set forth figures showing a significant decline in the number of United States produced complete television receivers and United States assembled receivers. Additionally, they advance statistics as to the number of U.S. producers of television receivers between 1960 and 1976 which show that the number of companies producing television receivers in the United States declined from 18 in 1968 to 12 in 1976. *fn232" Moreover, during the same period, the number of U.S. establishments in which television receivers were assembled declined from 30 to 15. Finally, plaintiffs adduce figures showing: (1) underutilization of U.S. television receiver assembly plants; (2) decline in operating profit of U.S. producers of television receivers; (3) decline in the average number of persons employed in U.S. establishments in which television receivers were assembled; and (4) decline in man hours worked on television receivers, all during periods relevant to the case. *fn233"

  As to agency findings, plaintiffs have set forth a number of "injury" findings of the U.S. Tariff Commission and the U.S. International Trade Commission. They quote at length from portions of those Commissions' findings giving conclusory opinions as to the source of the decline in the U.S. television industry. They also offer the Less Than Fair Value findings of the Secretary of the Treasury in connection with the 1921 Antidumping Act Proceedings. *fn234" All of these findings are discussed at length in our Public Records Opinion, in which they were all excluded from evidence on grounds of trustworthiness and lack of relevancy.

  Finally, plaintiffs devote some 67 pages of the FPS to a discussion of the "deterioration of television retail price points" in the U.S. caused by the alleged activities of the Japanese defendants. The term "price points" refers to retail price levels to which consumers have become accustomed and which are the maximum levels they expect to pay. In the television receiver market from the mid-1960's to the early 1970's, in the case of the middle and lower price range sets, plaintiffs assert that the price points were set by the mass merchandisers. Plaintiffs contend that the Japanese "cartel" concentrated on brands in the low price niche in the market, which included Emerson (predecessor of plaintiff NUE) and Dumont (an Emerson label). Defendants are said to have done so by their sales to mass merchandisers such as Sears, J. C. Penney, W. T. Grant, and R. H. Macy. Although prior to the Japanese "invasion" Emerson/NUE was capable of manufacturing and selling sets in the middle to lower price range by meeting price points with sufficient margin for the dealer to warrant continued purchases from Emerson/NUE, plaintiffs submit that after the Japanese saturation of the market at the lower end of the price range, the deterioration in the price points enabled the Japanese to dominate that segment of the market, leaving Emerson/NUE unable to compete.

  Plaintiffs have thus engaged in an extensive presentation of the manner in which Japanese pricing and marketing policies caused a lowering of prices in the domestic television receiver market, though they fail to mention that what they portray looks very much like the competitive model. The purpose of the presentation is to support plaintiffs' theory that: (1) failure of NUE and other U.S. television manufacturers and (2) the deterioration of the profit margin of Zenith and others which also resulted, in plaintiff's submission, from the vast increase in Japanese imports and the destruction of television retail price points in the U.S. market lead to an inference of defendants' conspiracy. Plaintiffs, however, cite no authority which supports this proposition. *fn235"

   It is plain that the depletion of the U.S. CEP industry is as consistent with a number of other inferences, such as efficient foreign competition or inefficient U.S. management, *fn236" as it is with the inference that the industry was harmed by a conspiracy among these particular defendants. But even beyond this observation, in the total absence of any evidence of collusion or, indeed, of any evidence of anticompetitive activities on the part of the defendants from which collusion could be inferred, it is impossible as a matter of law to infer the conspiracy plaintiffs allege from deterioration of the U.S. CEP industry. Such an "inference" would in reality be mere speculation. *fn237"

  N. Plaintiffs' Claims Concerning Defendants' Acquisitions of United States Manufacturers and Their Establishment of Manufacturing Facilities in the United States

  1. Introduction

  Plaintiffs devote over 70 pages of the FPS to their claims of "take over and elimination by the defendants and their co-conspirators of United States manufacturers through a pattern of unlawful acquisitions, mergers, joint ventures, and the establishment of manufacturing facilities in the United States." Plaintiffs complain of four acquisitions:

  (1) the acquisition by Matsushita of the consumer electronics products ("Quasar") division of Motorola;

  (2) the acquisition of Magnavox by N. V. Philips;

  (3) the acquisition of Warwick Electronics, Inc., (Warwick) by Sanyo;

  (4) the acquisition of Fisher Corporation (Fisher) by Sanyo.

  Plaintiffs contend that each of these acquisitions is an overt act in furtherance of the conspiracy among the defendants. Additionally, the Quasar and Warwick acquisitions are the subject of Zenith's claims under Section 7 of the Clayton Act, which are discussed separately infra.

  We recite in this segment the facts of record relevant to plaintiffs' "acquisition" claims. As a matter of convenience, we shall also set forth the facts relative to Sanyo's defense that Warwick was a "failing company" when acquired by Sanyo. While those facts are principally relevant to Sanyo's defense to plaintiffs' claims under § 7 of the Clayton Act, to the extent that they could be used at trial to deflect the claim that the Warwick acquisition was an anticompetitive act in furtherance of the conspiracy they have some bearing on plaintiffs' Sherman Act § 1 claim, even if only in a peripheral way.

  The FPS presentations about the acquisitions are extremely lengthy, in part because they describe in replete detail the negotiations for the various acquisitions and the terms of the acquisition papers. We need not summarize those matters here; rather, we will set forth only those matters essential to our disposition of the pending motions. *fn238"

  2. The Quasar Acquisition

  On May 28, 1974, an agreement was reached between Matsushita and Motorola under which Matsushita ultimately acquired, for a consideration of $ 100,000,000 and "reciprocal arrangements" in the solid state and related fields, the entire consumer electronic products division of Motorola, including Motorola's "Quasar" trade name, its manufacturing facilities throughout the United States, and its complete United States consumer electronic products distribution system. Matsushita (MEI) kept open and has continued to operate a number of former Motorola television production facilities. *fn239"

  Plaintiffs' primary allegations concerning the Quasar acquisition relate to what plaintiffs see as collusion in its background. In 1972, desiring to market television receivers in Japan, Motorola officials discussed with Mr. Morita, the President of Sony, Motorola's desire to establish a long-range cooperative association with the Japanese manufacturer. *fn240" From this discussion came a suggestion that Quasar sets be marketed in Japan in cooperation with AIWA, an audio equipment company controlled by Sony. As of June 6, 1973, Motorola and AIWA agreed upon the terms for AIWA to become the exclusive sales agent for Quasar brand color television receivers in Japan. A short time later, in mid-August, 1973, they announced an agreement under which AIWA would import four television receiver models manufactured by Motorola to be sold in Japan under the Quasar label. However, shortly thereafter, MEI entered into negotiations with Motorola, ultimately completing the Quasar acquisition. MEI insisted from early in the negotiations that the sales contract between Motorola and AIWA be dissolved. Accordingly, the AIWA arrangement was formally terminated by Motorola after the acquisition by Matsushita. Motorola paid $ 250,000 to AIWA in consideration for termination of their arrangement.

  Plaintiffs contend that the termination of the Motorola-AIWA agreement was evidence that the Japanese manufacturers, in this instance specifically MEI and Sony, were determined to keep the Japanese market closed to U.S. competition, thereby safeguarding their own ability to continue their high-price domestic conspiracy. In addition, plaintiffs contend that Motorola was "pressured" concerning the ongoing Quasar negotiations by virtue of "startling (price) increases from its Japanese suppliers of component parts" in January, 1974. This allegation is apparently intended to give rise to the inference that Motorola's Japanese suppliers participated in a conspiracy either to make it financially unattractive for Motorola to enter the Japanese market or to weaken Motorola in order to ease MEI's takeover. This allegation is not supported by the three documents listed to support it at page 8424 of the FPS, however. Moreover, it is strongly controverted by a variety of Motorola sources, including the testimony of Motorola's president, Mr. Galvin, and a letter from Motorola's counsel, Mr. Nygren, to the Justice Department.

  We have carefully considered all of plaintiffs' allegations about the background of the Quasar acquisition, but we fail to discern in them any hint of a link to the "unitary" conspiracy. Rather, we see evidence of rational pursuit of economic self-interest, antithetical to notions of conspiracy. *fn241" Motorola's plans to compete in the Japanese market were certainly in its own self-interest and totally contrary to plaintiffs' claims that Motorola was a participant in the conspiracy. Motorola's sale of a division which was losing money, see Part VII.Q.11, infra, was obviously in its own self-interest as well. There is no evidence or indication that MEI's acquisition of an American CEP manufacturing division was anything other than unilateral and in its own interest pursuant to a desire to establish a production facility in the U.S., a significant market for its goods.

  Motorola's participation in the conspiracy is asserted to stem in part from its accession to the demands of MEI and Sony with respect to cancellation of the AIWA contract. However, we see no evidence of a conspiratorial role. If Motorola wished to conclude a favorable agreement with MEI, it apparently had no choice but to cancel the AIWA contract, and it was plainly therefore in Motorola's self-interest to do so. Although plaintiffs suggest that Mr. Morita's acquiescence in the termination of the AIWA deal was against Sony's interest and in furtherance of the conspiracy, the fact is that Sony was compensated for the termination of the AIWA venture. Moreover, it would appear that Sony had little choice, faced with MEI's plans, unless it wished to sue. There is no evidence that the settlement was inadequate, and we cannot speculate that it was, elevating the fact of settlement into evidence of a conspiracy. *fn242"

  Finally, MEI had an interest in not having its own subsidiary manufacture TV sets which would compete with it in Japan. Merely because its own interest in this one regard is parallel to that of other Japanese manufacturing defendants does not constitute evidence of conspiracy. In fact, all of plaintiffs' conclusions in this area are speculation.

  Turning to plaintiffs' remaining factual development about the Quasar acquisition, plaintiffs set forth in their FPS the U.S. television receiver market shares of Motorola and MEI at the time of the acquisition (1974). These figures include reported sales of MEI's "Panasonic" brand and those of the "Penncrest" brand marketed by MEI's private label customer, J. C. Penney. According to these figures, *fn243" the joint Motorola-MEI market share was 15.6% of the monochrome market, 11.4% of the portable market, and 9.9% of the console market. The 1973 Trendex statistics for the U.S. color television market are as follows: Zenith, 23.8%; RCA, 20.1%; Magnavox, 7.8%; Sears, 7.3%; Motorola, 7.3%; G.E., 5.7%; Sony, 4.5%; Sylvania, 4.5%; Philco, 3.2%; Admiral, 3.1%; Panasonic, 2.1%; Montgomery Ward, 1.6%; Penncrest, 1.1%; Grants, 0.9%; Hitachi, 0.7%; Sharp, 0.7%; Sanyo, 0.6%; Packard Bell, 0.6%; Western Auto, 0.5%; Emerson, 0.3%; all others, 3.6%.

  Aside from potential impact on plaintiffs' Clayton Act § 7 case, we fail to see how these figures in any way support plaintiffs' conspiracy claims, and plaintiffs do not explain how they do. Indeed, armed with these and other uncontested figures, the defendants suggest that the fact of overriding significance concerning the U.S. color TV market is that every year for the last eight years Zenith has sold more color television sets in the U.S. than any other company, American or Japanese.

  3. The Warwick Acquisition

  Warwick was a Delaware corporation which manufactured consumer electronic products, musical instruments, and dining room furniture, with its principal manufacturing facilities located in Arkansas. *fn244" During the 1960's, Warwick was Sears Roebuck's principal television supplier. Jerome Brennan, Sears' senior buyer of televisions from mid-1967 through mid-1974, testified at a deposition that throughout his tenure it was Sears' policy to purchase from Warwick all of its requirements for television sets which Warwick was able to supply on a competitive and profitable basis. Plaintiffs themselves assert in the FPS that on June 30, 1969, Sears affirmed its determination to develop Warwick as a home entertainment electronic products source "second to none in the industry in every facet of its business," to purchase most, if not all, of its requirements from Warwick, and to concentrate in Warwick the maximum volume of Sears' purchases which competitive conditions would permit.

  Prior to September, 1966, Sears was Warwick's majority shareholder, and, at all times since September 1, 1966, Sears has owned at least 25% of Warwick's outstanding shares. Consistent with its policy of developing and purchasing from Warwick, Sears heavily financed Warwick's operations. Warwick's audited consolidated financial statement for its fiscal year ending March 30, 1968 reflects long-term (ten years at the prime rate) loans from Sears of $ 15,000,000. Moreover, in 1970, Sears increased its financial assistance to Warwick, agreeing to purchase finished products from Warwick "as manufactured" rather than "when shipped" as in the past. By this device Sears, in effect, assumed the burden of financing Warwick's finished goods inventory, assistance which Warwick valued at $ 2,500,000 in that one year. In 1975, approximately 66% of Warwick's net sales consisted of sales of color television receivers and related service parts, virtually all of which were sold to Sears. In that year, Warwick was the sole domestic, and on a dollar volume basis, the largest single supplier to Sears of color television receivers.

  All of the foregoing facts are undisputed. Also undisputed is the fact that Warwick had been losing money "hand over fist." After 1973, Warwick was unable to generate a sufficient volume of business to remain viable, and continued to operate at a loss and to lose business. Warwick lost 3.8 million dollars in 1974, ending the year with negative retained earnings. *fn245" In 1975, Warwick lost 8.9 million dollars, ending the year with a stockholder's equity deficit in excess of $ 5 million dollars and a retained earnings deficit of nearly $ 10 million dollars. After being advised that Sears would purchase no table-top color TV's from it after June of 1976, Warwick terminated all of its engineering personnel, leaving itself with no future in the television business.

  While the parties have differing contentions as to the reason for Warwick's demise, two important facts are undisputed. First, Sanyo and Toshiba offered to sell and, in fact, did sell color TVs to Sears for lower prices than Warwick could profitably meet. Second, the quality of the imported color TVs available to Sears was vastly superior to those which Sears was buying from Warwick, resulting in enormous dollar savings on warranty expense. *fn246"

  As a result of the better quality and lower prices available from Sanyo and Toshiba, Sears gradually reduced its color TV purchases from Warwick. *fn247" Because of the 1974 recession, Sears further reduced its purchases from Warwick. At one point, because Warwick had indicated disinterest in producing those TV receivers that would not make a significant contribution towards its fixed costs, Sears had to make plans to import 19,015 sets which Warwick had the ability to produce. The only set which Sears was planning to buy abroad in 1975, and which Warwick both could make and wished to make, *fn248" was offered by Warwick at a higher price than the comparable imported model, even before considering the higher service costs.

  As of September 15, 1975, Sears found that it had paid to Warwick price premiums over import prices exceeding.$ 1.2 million; that Warwick was over 11,000 sets behind its contracted production schedule for Sears; that Warwick had an inventory of over 18,000 finished sets which it was unable to ship pending repairs of manufacturing defects; and that the defect rate of Warwick products sold to Sears was over four times higher than that of the imported products Sears bought. By October 31, 1975, Sears finalized its decision to discontinue purchasing table-top color television sets from Warwick in favor of sets offered to it by Sanyo and Toshiba which had better specifications, brighter pictures, lower power consumption, better serviceability, and lower costs.

  In 1976, Sanyo acquired the controlling interest in Warwick's television business through a complicated tripartite transaction among Sanyo, Sears, and Whirlpool (Warwick's largest stockholder). The essentials of this transaction were that: (1) defendant Sanyo Manufacturing Company (SMC), a new corporation, was organized; (2) Sears retained its 25% interest in the reorganized corporation; (3) Sanyo acquired virtually all of the outstanding stock of SMC other than that held by Sears; and (4) Sears and SMC entered into a contract by which Sears agreed to purchase at least 70% of its console color television requirements from SMC, provided SMC's prices and features were competitive. *fn249"

  Zenith has alleged that Warwick was debilitated by the "whip-saw price tactics" that Sanyo and Toshiba aimed at Warwick, to the point where it was vulnerable to the demands of the cartel. Zenith has, however, offered no facts, admissible or otherwise, to support this contention.

  We will comment infra on the significance of the foregoing facts to plaintiffs' Clayton Act § 7 claims, including Sanyo's "failing company" defense. In terms of the conspiracy claims, however, we fail to see how the acquisition by Sanyo of a controlling interest in Warwick constitutes evidence of conspiratorial activity. What Sanyo acquired was not a viable company (the facts make clear that Warwick's demise was inevitable, if not already a fact), but rather a manufacturing facility. The desire of an individual defendant to improve its competitive position in the United States market by establishing manufacturing facilities here is not only consistent with unilateral behavior and self-interest, but indeed with notions of competition rather than restraint of trade.

  There is certainly no evidence that Sanyo acted in concert with any of the other Japanese defendants in connection with the Warwick acquisition. As for Sears, its self-interest was served by continuing Warwick as a viable entity for two reasons. First, Sears' financial interest (stock ownership and notes payable) was thereby protected. Secondly, a domestic facility remained as a potential source of supply. There is simply no evidence to support plaintiffs' claim that the Warwick acquisition was yet another link in the chain of defendants' "unitary" conspiracy; all plaintiffs have adduced is speculation.

  4. The Sanyo-Fisher Acquisition

  Fisher Corporation (Fisher) is engaged in the production and sale of stereo and audio equipment in the United States. It was acquired in 1969 by Emerson Electric Company of St. Louis, Missouri, *fn250" and was subsequently acquired from Emerson by the Sanyo interests. *fn251" The FPS contains a list of Sanyo, Emerson, and Fisher personnel who discussed the acquisition, as well as various financial and organizational data with respect to Fisher, whose gross sales in 1974-1975 were estimated by it to be in the $ 28 to $ 35 million range. But other than basic background data, the plaintiffs, in their FPS, tell us nothing about the impact of the transaction except to allege that the acquisition immediately eliminated a competitor of Sanyo, increased Sanyo's share of the United States consumer electronics market, integrated the former Fisher facilities with "highly vertically integrated production facilities" in the Far East, and increased concentration in the United States CEP market. More precisely, plaintiffs have told us nothing specific about the impact of the transaction on Zenith or the U.S. stereo market.

  We will explain in Part VIII.B., infra, that plaintiffs have offered virtually no evidence in support of their stereo claims. We extend this discussion only to note that the acquisition of Fisher by the Sanyo interests is in no wise demonstrated to have even the vaguest connection with the overall "unitary" conspiracy. There is no evidence of concerted activity; there is no indication that the acquisition was other than in Sanyo's self-interest, stemming from its desire to improve its competitive position in the stereo market. There is only speculation.

  5. The Philips-Magnavox Acquisition

  N.V. Philips Gloelampenfabrieken, incorporated in the Netherlands, is one of the world's largest industrial corporations. Though highly diversified, Philips is heavily involved in the manufacture and sale of consumer electronic products, including television receivers. Philips' American subsidiary, North American Philips Corporation, is a large corporation which manufactures and sells a large variety of products, including certain products imported from Philips in the Netherlands. The plaintiffs take some 75 pages of their FPS to tell us that (1) the Philips interests were seeking to acquire a U.S. television manufacturer; (2) at one time they considered the acquisition of Zenith; (3) Magnavox's market situation and corporate well-being were deteriorating; and (4) Magnavox was ultimately acquired by North American Philips Development Corporation, a subsidiary of North American Philips Corporation created for the purpose of acquisition of the Magnavox stock, in a transaction that was financed by Philips itself.

  That is all plaintiffs tell us about the acquisition except to suggest that it somehow corroborates the worldwide scope of the alleged conspiracy because of certain "cooperation agreements" between Philips and Matsushita, discussed in Part VIII.C., infra. Plaintiffs intimate that although Philips had been interested in acquiring Motorola, and although Matsushita had been interested in acquiring Magnavox, they had adopted a "hands off" policy towards each other's "turf" after the other's intention became known. There is, however, no admissible evidence offered to support this contention.

  Plaintiffs have made a number of allegations, against the background of the Philips-Matsushita "cooperation agreements," see Part VIII.C., infra, which they apparently have injected into the Philips-Magnavox acquisition section of the FPS to elevate the significance of the transaction. First, plaintiffs allege that Philips and Matsushita "consulted on their respective plans with respect to consumer electronic product manufacture and sales in the United States." However, the documents which plaintiffs reference in support of this allegation (MIH 029201-210) are in the document depository only in Japanese. Plaintiffs have alleged that Philips and MEI conferred from time to time concerning the marketing strategy to be employed with respect to the sale of products manufactured by Matsushita Electronics Corp. (MEC). But that would not be improper, for MEC was a joint Philips-Matsushita venture, not shown to be itself unlawful. Finally, plaintiffs cite a document (MIH 029415-17) which is not in the document depository, but which, according to the copy furnished in one of plaintiffs' submissions to the court, does nothing more than evince the friendship between Philips and Matsushita and speak amorphously about having a positive long-term relationship. This adds nothing to plaintiffs' case, nor to the significance of the Philips-Magnavox acquisition.

  We shall not extend this discussion by a lengthy summation. Suffice it to say that, just as in the case of the acquisitions discussed in the preceding sections, there is no evidence of concerted action; the transaction appears to have been unequivocally in Philips' own best interest; and there is nothing here from which an inference (as opposed to speculation) of conspiratorial activity can be drawn. Indeed, there is nothing here which links Philips in any way to the alleged conspiracy.

  6. Plaintiffs' Claims About Establishment of United States Manufacturing Facilities by the Japanese Defendants

  Plaintiffs contend that the Japanese manufacturing defendants furthered their conspiracy to take over the American CEP market by establishing manufacturing facilities in the United States. Although they devote approximately thirty pages of their FPS to this aspect of the matter, what emerges is the following. In 1972, Sony established a manufacturing facility in San Diego, California. By virtue of the Quasar acquisition, Matsushita obtained manufacturing facilities in Franklin Park, Illinois and Caguas, Puerto Rico. By virtue of the Warwick acquisition, Sanyo obtained a manufacturing facility in Forrest City, Arkansas. In 1978, Melco constructed a manufacturing facility in Irvine, California, and one in Los Angeles, California. In 1978, Toshiba constructed a manufacturing facility in Lebanon, Tennessee, and, in 1979, Sharp constructed a manufacturing facility in Memphis, Tennessee.

  This very review reflects the random nature of the complained of acquisitions, negating any claims of parallel, much less concerted, activity. These acquisitions are incontrovertibly in furtherance of the interest of the company establishing the facility, giving it a better position in the American market, thus enhancing competition.

  In sum, we fail to see how plaintiffs' claims concerning defendants' establishment of manufacturing facilities can in any respect be used as a basis for drawing an inference of conspiratorial activity.

  O. Plaintiffs' Evidence Concerning "Defendants' Systematic Price Discrimination in the U.S."

  Plaintiffs devote over 100 pages of their FPS to what they describe as "Defendants' Systematic Price Discrimination in the U.S." This segment consists of page after page of schedules purporting to reflect prices of U.S. sales subsidiaries of the Japanese manufacturing defendants to their various customers and comparisons of sales analysis reports to price lists. The latter documents purport to analyze invoices produced in discovery and demonstrate that similar goods were sold to different customers for different unit prices. The ultimate thrust of plaintiffs' claims as to each of the sales subsidiaries, as exemplified by the following passage concerning MECA, is that the:


price lists, price schedules, sales bulletins, promotional bulletins, sales analysis reports, sales invoices and sales allowances establish that MECA regularly sold its models of consumer electronic products at prices substantially lower than the prices for such models set forth or disclosed in MECA's answers to plaintiffs' interrogatory Nos. 45 and 46 and supplemental interrogatory Nos. 10 and 11.... Further, MECA's price lists, price schedules, sales bulletins, promotional bulletins, sales analysis reports, sales invoices and sales allowances prove that MECA regularly charged substantially lower prices to its large, preferred customers and chain stores than defendant charged to its regular dealers for identical models of its consumer electronic products.

  Plaintiffs contend that this material is evidence of the "unitary" conspiracy.

  The material contained in these FPS pages constitutes the basis for Zeniths' Robinson-Patman Act claims discussed in Part X, infra. *fn252" We point out there, see n.394, infra, that there are serious problems with plaintiffs' proof. We highlight in that discussion defendants' contention that Zenith has failed to provide proof of certain jurisdictional elements required by the words of the Robinson-Patman Act. Various defendants claim, for example, that Zenith has not come forth with sufficient evidence of at least two contemporaneous sales of comparable merchandise to at least two different purchasers. They argue that Zenith does not have evidence of actual sales prices, as opposed, for example, to list prices, and that only actual sales prices will support a Robinson-Patman claim. They also contend that the instances of price discrimination in plaintiff's FPS are in any event de minimis. The Matsushita defendants claim that Zenith has failed to show that the commodities were sold for use or resale within the United States. We have examined these contentions and have found that in most, though not in all, instances, they were well-founded.

  It is plain that there is no evidence of any logical connection between the supposed price discrimination and the "unitary" conspiracy, even if there is some cognizable evidence of price discrimination. First we note that there is no evidence of any collusion in connection with alleged price discrimination. Plaintiffs have adduced no direct evidence of collusion in pricing, and the documents described in plaintiffs' FPS show widely disparate patterns. We have been cited to no authority supporting the proposition that disparate conduct gives rise to evidence of conspiracy. Second even assuming parallel conduct, there is no suggestion that such price discrimination as may have existed was contrary to the interest of the seller. It does not militate against the self-interest of a seller to regularly charge substantially lower prices to its large preferred customers and chain stores than to other regular customers for identical models of CEP's. Such conduct reflects rational independent choice, not conspiracy. The plaintiffs thus "fail" the Bogosian/Venzie test. Finally, there is an absence of focused evidence of sales to other types of customers below the prices set forth in defendants' answers to plaintiffs' interrogatories 45 and 46(c). The random nature of the evidence and the lack of any focus totally precludes any contention that the defendants' price discrimination in the U.S. is evidence of the "unitary" conspiracy.

  P. Plaintiffs' Contentions Based Upon the "Undisputed Facts and Legal Propositions" Identified by Plaintiffs' Counsel in the Course of Summary Judgment Argument on August 28, 1980

  As we have earlier observed, we invited counsel to take as much time as they wished during the final summary judgment arguments in August, 1980 to pull out of the massive piles of documents which constitute the sinews of plaintiffs' case those documents which demonstrate the presence or absence of a genuine issue of material fact. Defendants' counsel accepted our invitation, notwithstanding the added challenge of proving a negative. As we have said, they spent four days reviewing and analyzing plaintiffs' critical documents. Plaintiffs' counsel, Mr. Rome, however, declined the invitation, instead devoting the bulk of his argument to what he described as "undisputed facts and legal propositions." Indeed, with what we might call a touch of bravado, Mr. Rome stated that he was content to rest his case in opposition to defendants' motions on those undisputed facts and legal propositions which he proceeded to elucidate. *fn253"

  Despite Mr. Rome's offer, we plainly do not rest our decision of these summary judgment motions upon analysis of the success or failure of his argument from "undisputed facts and legal propositions." However, in view of the fact that Mr. Rome devoted most of his final summary judgment argument to this approach, and also because it is useful as a kind of "retrospective," we shall take up plaintiffs' argument from these alleged undisputed facts and legal propositions.

  Preliminarily, we note that it is not correct that all of the listed facts are undisputed. Many of the facts asserted by Mr. Rome to be undisputed are not even supported by the record, and many of the alleged facts are gleaned from inadmissible evidence. However, except as otherwise noted, we will assume lack of dispute and admissibility for purposes of this analysis. Plaintiffs' list of undisputed facts and legal propositions is as follows: *fn254"

  1. The defendants have colossal wealth and combined financial power, are engaged in extensive lines of business, and have a huge sales volume.

  2. There are interlocking officers and directors among the defendant groups, including mutual stock ownership, financial guarantees and loan arrangements, control and dictation of decisions by the parents, and absorption by the parents of losses of U.S. subsidiaries. *fn255"

  3. Mr. Yamaguchi was selected by the President of Melco in 1974 to become the head of MSI.

  4. Personnel are exchanged among parent and subsidiary companies.

  5. The Japanese defendants are members of the EIAJ, JMEA, and many other groups and committees, and designated representatives at all levels within each company attended meetings of numerous groups and committees.

  6. Various defendants attended meetings of these intercorporate groups and committees consistently over extended periods of time.

  7. Defendants themselves have admitted in answers to interrogatories and in documents that they discussed and exchanged information on production, shipment, inventory, and other business data. *fn256"

  8. "The Japanese defendants met and discussed their acting together concerning the penetration of the U.S. market and they put it all down in written documents, actually signed by the head of companies each year over many years." *fn257"

  9. Copies of the "cartel agreements" went to the Japan Light Machinery Information Center in New York, of which the defendants' U.S. subsidiaries and related companies were members.

  10. The defendants' coordinated pricing was intended to be applicable to the United States market. *fn258"

  11. The Japanese defendants agreed to allocate customers among themselves by means of the Five Company Rule and the customer registration provisions. *fn259"

  12. No Japanese manufacturers other than Toshiba and Sanyo were the historical suppliers of Sears.

  13. The Manufacturers' Agreements were recognized as cartels by the OECD, an internationally recognized entity.

  14. The "cartel agreements year-by-year report, with satisfaction and pride on the part of the signatories, the enormous increase in their sales of televisions in the United States."

  15. The number of United States companies involved in this industry has dwindled significantly during the same period of time covered by these "cartel agreements." At least 20 companies, including NUE, left the field, throwing out of their jobs literally tens of thousands of employees. Moreover, RCA and General Electric have sustained substantial losses in their television business.

  16. The "cartel agreements" were being discussed by the participants at the same time the JFTC was pursuing the Six Company Case.

  17. Mr. Nishi, a senior official of Hitachi, stated that the success of the Japanese industry in the U.S. had been achieved entirely on their own without government assistance.

  18. Defendants agreed upon a check price for items destined for sale in the United States, and this price was knowingly used by defendants to conceal the actual price. *fn260"

  19. Defendants systematically sold at prices "substantially below the dumping levels of the check prices." *fn260"

  20. The statements in the "cartel agreements" are admissions by each of the heads of the Japanese defendant companies who signed them.

  21. "Fourteen of the great men of the Japanese consumer electronics industry who signed the cartel agreements year after year" did not file any affidavits in this proceeding.

  22. "There are literally at least 200 other individuals, who attended the various meetings of the conspiratorial groups, who have not signed or filed any affidavits in this case." *fn261"

  23. "There is a strange, suspicious and unexplained absence of notes, minutes, memoranda, and other documentation relating to most of the defendants' meetings at the conspiratorial groups." *fn262"

  24. The JFTC investigated both horizontal and vertical price fixing agreements covering certain CEPs in Japan, growing out of the pricing activities of certain of the Japanese defendants. *fn263"

  25. The National Women's Consumer Organization in Japan organized a boycott of the Japanese television manufacturers in Japan.

  26. Meetings of the leading Japanese defendant manufacturers were held to discuss a concerted reaction to the consumer boycott, and as a result of these meetings, prices were lowered in the home market. *fn264"

  27. Incident to Motorola's deal with AIWA it was publicized in Japan that Motorola's TVs were to be marketed through AIWA and were going to be sold for as much as 150,000 yen under the prices then prevailing in Japan.

  28. A condition of Matsushita's deal to buy Motorola's color TV assets was the requirement that Motorola withdraw from the deal with AIWA and not sell its sets in Japan.

  29. An internal memo of Motorola's states that the announced reasons for ending the AIWA deal were false. *fn265"

  30. Manufacturers had television plants in Korea and Taiwan, and the output of those factories was exported to United States and not to Japan. *fn266"

  31. The Japanese manufacturers admitted and agreed in the cartel agreements that if they were to sell in the United States below the so-called "check-price" or "minimum price" it would disrupt the United States market and "there is also no dispute that defendants' counsel in last week's argument acknowledged the fact." *fn267"

  32. There is no affidavit from any defendant manufacturer to the effect that they sold in the United States only at the check price.

  33. The failure to report the actual prices of a transaction on a United States Customs Form No. 5515 is a violation of the United States laws.

  34. The United States Customs Form No. 5515 were falsified by at least some of the defendants; some of the United States subsidiary defendants acted at the direction of their parent companies as conduits for the payments of rebates; some of the Japanese parent companies at the request of their subsidiaries transmitted funds or otherwise aided and abetted the payment of rebates; the non-disclosure of the rebates and the falsification of the 5515 document resulted in the payment of a higher Customs duty on the imported goods; and the higher Customs duties were less than the dumping duties which might otherwise have been imposed.

  35. There is no affidavit from any cartel signatory of any Japanese company, other than Mr. Morita (of Sony), attesting that he has personal knowledge that his company did not rebate and that he had no knowledge that other defendant companies were rebating.

  36. "One would not normally pay a higher Customs duty unless there was some secret purpose to be served, a purpose which by its secrecy we suggest is necessarily a fraudulent one."

  37. Mr. K. Matsushita gave an interview concerning a meeting in which he said, "It is important that top leaders of enterprises hold talks and get the whole industry to act in concert"; and further


To overcome, this difficulty, today, it is important, first of all, that top leaders of enterprises hold talks and get the whole industry to act in concert ... top level conferences the first of the kind in the appliance industry were started last year at my suggestion for the purpose of achieving cooperation and stabilization in the industry through the good sense of all those concerned. In this way, we are striving to seek a way out of the present difficulties.

  38. In 1964, Akio Morita, Chairman of the Board of Sonam and President of Sony, said to Joseph Sullivan (then a sales manager for Sonam):


"Sullivan-san, militarily we could never defeat the United States. But economically we can overcome the United States and become No. 1 in the world." (emphasis supplied).

  39. No defendant filed an affidavit contending that the Japanese manufacturers sold at the same price in the United States at which they sold in Japan.

  40. Additional costs are involved for a Japanese company seeking to sell its product in the United States. It would normally be concluded, therefore, that the export price would be higher because of packaging, shipping, ocean freight, insurance, and Customs duty. *fn268"

  41. A company would not normally pay any higher taxes than it is obligated to pay. The Japanese Commodity Tax is based upon the selling price disclosed by the defendants. Therefore, defendants would not normally overstate their selling price. To do so would be to overstate the basis for calculation of their tax obligations. Therefore, the commodity tax information is a permissible and acceptable source for price information. *fn269"

  Because we have covered virtually all of these points in our previous discussion, and because the ones that we have not covered are of no significance, we shall not extend this opinion with seriatim comment on the "undisputed facts and legal propositions." We do, however, make several points. First, the foregoing litany is remarkable for the number of instances in which plaintiffs argue from the failure of defendants to come forth with affidavits, even though, in the present posture of this case, that is not their burden. Secondly, it is clear beyond cavil that this presentation adds nothing to what we have already analyzed and that the "undisputed facts and legal propositions" are not sufficient to get the plaintiffs beyond the motions for summary judgment. Indeed, it would be incredible if claims of the magnitude asserted by the plaintiffs could rest on such a flimsy foundation. The fact that plaintiffs relinquished the opportunity afforded them during final summary judgment argument to spend unlimited time detailing how the documents or other evidence they have proffered could create a genuine issue of material fact and instead devoted their time to a discussion of these "undisputed facts and legal propositions" reflects the bankruptcy of their case.

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