Evergreen Partnering Group v. Pactiv Corporation
832 F.3d 1
1st Cir.2016Background
- Evergreen Partnering Group collected used polystyrene, processed it into recycled resin, and sought to sell the resin to major converters (Dart, Dolco, Genpak, Pactiv, Solo) and obtain commissions on sales to support a "green foam" product line.
- Evergreen alleges that the five largest converters, through the ACC Plastics Foodservice Packaging Group, agreed at a May 31, 2007 conference call to refuse commission-based deals with Evergreen and to promote a competitor, PDR, to block Evergreen's access to end users and suppliers.
- Some defendants (Genpak, Dolco, Solo) tested or purchased Evergreen resin; Genpak and Dolco also provided limited funding and purchase commitments but rejected commission terms. Other defendants tested but declined to contract because of quality issues (odor, contamination) with Evergreen's resin.
- PDR produced some recycled resin, had start-up and scaling problems (including landfilling some trays early on), but produced material that defendants tested and purchased; the record did not show PDR was a sham.
- Evergreen sued under §1 of the Sherman Act alleging a group boycott; the district court granted summary judgment for defendants, and the First Circuit affirmed, holding Evergreen failed to present evidence tending to exclude independent action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants entered an illegal group boycott under §1 | Defendants agreed via Plastics Group to universally refuse commission-based deals and to favor PDR, blocking Evergreen's market access | Defendants acted independently, plausibly refusing to deal because of legitimate business reasons (costs, resin quality); trade association activity and introductions are lawful | No conspiracy: summary judgment affirmed — plaintiff failed to present evidence tending to exclude independent action |
| Whether trade-association communications and meetings support an inference of conspiracy | Plastics Group meetings facilitated coordination and favored PDR over Evergreen, creating a plus factor | Mere participation in trade association and nonbinding recommendations do not imply an agreement to boycott | Trade-association membership/meetings are a weak plus factor; without traditional conspiracy evidence, insufficient to survive summary judgment |
| Whether PDR was a sham used to sabotage Evergreen | PDR was nonoperational and landfilled trays, so Plastics Group promoted a sham competitor to block Evergreen | PDR produced resin, sold/tested batches with defendants, and faced legitimate scaling/startup problems | PDR not a sham as a matter supporting an inference of conspiracy; evidence showed some production and legitimate difficulties |
| Whether parallel refusals (no commissions) plus market structure suffice to infer conspiracy | Parallel refusals plus concentrated market, motive to avoid paying for recycled resin, and other circumstantial evidence show collusion | Parallel conduct is consistent with independent business decisions, especially given resin quality complaints and costs; Matsushita/Monsanto require evidence tending to exclude independent action | Parallel conduct alone insufficient; plaintiff must produce plus factors of traditional conspiracy type and evidence excluding independent action; plaintiff failed to do so |
Key Cases Cited
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (plaintiff must present evidence that tends to exclude independent, permissible explanations for parallel conduct at summary judgment)
- Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984) (same standard: must tend to exclude possibility defendants acted independently)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (parallel conduct alone does not state a §1 conspiracy; plausibility and plus factors matter)
- Evergreen Partnering Grp., Inc. v. Pactiv Corp., 720 F.3d 33 (1st Cir. 2013) (prior opinion identifying industry concentration and trade-association meetings as context that could support plausible agreement)
- White v. R.M. Packer Co., 635 F.3d 571 (1st Cir. 2011) (§1 requires an agreement; summarizes use of plus factors and limitations on inferences from ambiguous evidence)