Second Circuit Reverses Summary Judgement For Defendant In Published Paper MDL

Posted by : Matthew Wild | On : August 9, 2012

On August 6, 2012, the Second Circuit brought reality back to standards governing summary judgment in antitrust cases.  See In re Publication Paper Antitrust Litig., 11-101-cv (2d Cir. Aug. 6, 2012).  Stora Enso North America (“SENA”) was acquitted of price fixing with UPM-Kymmene even though UPM’s CEO testified that he agreed with SENA’s CEO to fix prices.  A price fixing class action was later brought against SENA, its foreign parent and UPM (which settled).  Notwithstanding UPM’s CEO”s sworn testimony admitting the conspiracy, the district court granted summary judgment in favor of the defendants.  The Second Circuit reversed against SENA holding that a jury should decide the credibility of UPM’s CEO’s testimony.  The Second Circuit also held that there was sufficient proof of impact: “the demonstrable existence of an agreement between [the CEOs] to follow price increases announced by competitors, if proven, constitutes strong evidence that the alleged agreement caused at least some element of the subsequent price increases (e.g., amount or effective date), or, at a minimum, the inability of plaintiffs to negotiate below the list price. Furthermore, the causal link is presumed to be particularly strong when, as alleged here, the agreement is between executives at rival companies, each of whom has final pricing authority.”

There was no evidence of SENA’s parent’s involvement and therefore summary judgment in its favor was affirmed.

In any other type of case, I doubt that a court would grant summary judgment in face of a CEO’s admission or obvious evidence of causation and damages.  But with so many cases warning against finding the existence of a conspiracy (or causation from price increases) when it is plausible that the defendants acted independently, district courts lean to granting summary judgment even in face of direct evidence.  Such decisions would never fly in any other type of case.  Fortunately, the Second Circuit made clear that the plausibility of independent action as opposed to a conspiracy is not an appropriate consideration in the face of direct evidence of the agreement (and the subsequent price increase), and applied the standard governed by Rule 56.

Author: Matthew Wild, Wild Law Group PLLC

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