Anderson News, L.L.C. v. Am. Media, Inc.
899 F.3d 87
2d Cir.2018Background
- Anderson News (wholesaler) ran ~30% of U.S. single‑copy magazine distribution in 2008 and in January 2009 announced a $0.07 per‑copy surcharge to shift inventory/scan‑based trading costs to publishers, with a short deadline and threat to stop shipping non‑compliant publishers.
- Publishers and their distributors (defendants) largely refused; some negotiated temporary arrangements, some switched to alternative wholesalers, and a subset paid the surcharge for February only.
- Anderson threatened a "going dark" cutoff; after a TRO compelled deliveries, Anderson ceased operations and later filed antitrust and state‑law claims alleging a conspiracy to boycott it and drive it out of business.
- Defendants counterclaimed that Anderson (and Source) conspired to fix prices via the surcharge and induced retailer threats; the district court granted summary judgment for defendants on Anderson’s claims and for Anderson on counterclaims.
- On appeal, the Second Circuit applied Matsushita’s "tends to exclude" standard, reviewed the record (communications, parallel conduct, and economist reports), and affirmed: evidence was ambiguous and the alleged conspiracy was economically implausible; counterclaimants lacked antitrust standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did defendants enter a Section 1 conspiracy (group boycott) to refuse to deal with Anderson and drive it out of business? | Anderson: communications, simultaneous refusals, and industry coordination show an agreement to boycott. | Defendants: each independently refused Anderson's higher‑cost surcharge and took lawful competitive steps (monitoring, contingency planning, negotiation). | No §1 violation; evidence equally consistent with independent action and thus fails Matsushita's "tends to exclude" requirement. |
| Was the alleged conspiracy economically plausible such that broad inferences from circumstantial evidence are permitted? | Anderson: economist (Dr. Marx) opined reduced wholesaler competition could benefit publishers indirectly (multi‑sided market effects). | Defendants: reduced wholesaler competition likely harms publishers or is speculative; no clear long‑term benefit to publishers. | Alleged conspiracy was economically implausible or speculative; higher evidentiary showing required which Anderson did not meet. |
| Did communications and increased interfirm contacts constitute sufficient "plus factors" to infer conspiracy when combined with parallel conduct? | Anderson: spike in communications, monitoring, and some statements show concerted action. | Defendants: communications reflect legitimate market monitoring, contingency planning, and negotiations; conduct was not truly parallel. | Communications and conduct were ambiguous and as consistent with lawful behavior; plus factors were inconclusive. |
| Do AMI, Hearst, and Time have antitrust standing on their counterclaims against Anderson (alleging price‑fixing and inducement to boycott)? | Counterclaimants: Anderson's going‑dark and actions caused tens of millions in lost sales and costs, flowing from the alleged conspiracies. | Anderson: alleged injuries stemmed from Anderson's unilateral conduct and competitive switching, not from an anticompetitive scheme that reduced market competition. | Counterclaimants lack antitrust standing; alleged injuries do not "flow from that which makes defendants' acts unlawful" and are not the type antitrust laws protect. |
Key Cases Cited
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (Sup. Ct.) (Matsushita "tends to exclude" standard for inferring conspiracy)
- Monsanto Co. v. Spray‑Rite Serv. Corp., 465 U.S. 752 (Sup. Ct.) (agreement requires a "meeting of minds"; independent action is lawful)
- Klor's, Inc. v. Broadway‑Hale Stores, Inc., 359 U.S. 207 (Sup. Ct.) (group boycott per se illegal)
- Apple, Inc. v. DOJ (panel decision cited), 791 F.3d 290 (2d Cir.) (conscious commitment and plus‑factor framework)
- AD/SAT, Div. of Skylight, Inc. v. Associated Press, 181 F.3d 216 (2d Cir.) (requiring stronger evidence where alleged conspiracy is implausible)
- In re Publ'n Paper Antitrust Litig., 690 F.3d 51 (2d Cir.) (summary judgment in antitrust claims; quality of evidence varies with economic plausibility)
- Apex Oil Co. v. DiMauro, 822 F.2d 246 (2d Cir.) (limits on inferring conspiracy from ambiguous evidence)
- First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253 (Sup. Ct.) (legitimate refusal to deal based on price is not conspiracy)
- Brunswick Corp. v. Pueblo Bowl‑o‑Mat, Inc., 429 U.S. 477 (Sup. Ct.) (antitrust injury must flow from anticompetitive aspect of conduct)
- Gatt Commc'ns, Inc. v. PMC Assocs., L.L.C., 711 F.3d 68 (2d Cir.) (antitrust standing and antitrust injury analysis)
- Blue Shield of Va. v. McCready, 457 U.S. 465 (Sup. Ct.) (injury ‘‘inextricably intertwined’’ with the claimed anticompetitive scheme can be compensable)