123 F.Supp.3d 478
S.D.N.Y.2015Background
- Anderson News, a national magazine wholesaler losing money for years, announced in mid-January 2009 a unilateral plan to impose a $0.07 per-copy surcharge and shift SBT (scan-based trading) inventory carrying costs to publishers/distributors, with a February 1 deadline.
- Anderson had negotiated commitments from two large retailers (Walmart, Kroger) and controlled a majority interest in ProLogix East (a joint logistics venture) and planned a “going dark” strategy to withhold deliveries if publishers refused the terms.
- Publishers and distributor-defendants overwhelmingly rejected Anderson’s proposal; only 86 of 1,570 publishers accepted. Competing wholesalers (e.g., TNG, Source) did not adopt the same inventory-shift scheme.
- Anderson shut down ProLogix East deliveries; TNG obtained a TRO in Delaware forcing deliveries to resume. After the TRO, Anderson decided to permanently cease operations and later filed this antitrust suit claiming a concerted refusal to deal drove it out of business.
- After extensive discovery, the district court concluded evidence showed independent, economically rational responses by defendants (communications were mostly information-seeking or permissible coordination with clients), no strong plus-factors supporting a conspiracy, and that Anderson’s own business decisions caused its failure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of concerted action in violation of §1 Sherman Act | Defendants coordinated (meetings, calls, emails) to refuse Anderson’s terms and force Anderson out | Communications were lawful, informational, or independent business decisions; no meeting of minds or strong plus-factors | No concerted action; summary judgment for defendants on §1 claim |
| Whether parallel conduct + plus-factors suffice to infer conspiracy | Parallel refusals and interfirm communications permit inference of conspiracy | Parallel conduct was economically rational and consistent with independent action; plaintiffs failed Matsushita ‘tends to exclude’ standard | Plaintiffs failed to present evidence tending to exclude independent action; summary judgment granted |
| Antitrust injury and causation under the Clayton Act (§4) | Anderson lost business because of defendants’ concerted refusal to deal | Anderson’s own pricing/inventory-shift decision and subsequent “going dark” (and choice to close after TRO) caused its failure; refusal to accept above‑market terms is not antitrust injury | No antitrust injury or but‑for causation shown; summary judgment for defendants |
| State-law tort claims (tortious interference, civil conspiracy) | Defendants intentionally interfered with Anderson’s contracts and conspired to injure it | Anderson’s breaches and business decisions, not defendants, caused any contract failures; civil conspiracy requires underlying tort | Summary judgment for defendants on tortious interference and civil conspiracy |
Key Cases Cited
- Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (U.S. 1984) (plaintiff must show conscious commitment to a common scheme)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (ambiguous conduct consistent with competition cannot alone support conspiracy inference; plaintiff must present evidence tending to exclude independent action)
- Apex Oil Co. v. DiMauro, 822 F.2d 246 (2d Cir. 1987) (parallel conduct requires “plus factors” to permit inference of conspiracy)
- In re Publication Paper Antitrust Litigation, 690 F.3d 51 (2d Cir. 2012) (plaintiff’s theory plausibility affects the strength of circumstantial evidence required)
- Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (U.S. 1990) (antitrust injury requires harm of the type the antitrust laws protect)
- Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (U.S. 1959) (group boycotts/ concerted refusals to deal can be per se unlawful)