Stanislaus Food Products Co. v. Uss-Posco Industries, 2015 U.S. App. LEXIS 17780

Background

Stanislaus Food Products (a tomato cannery) buys cans from Silgan, which contracts for tin mill products with multiple suppliers including U.S. Steel and UPI (a 50/50 joint venture of U.S. Steel and POSCO America).
Stanislaus sued alleging a 2006 market-allocation conspiracy: U.S. Steel allegedly ceded the western U.S. tin mill products market to UPI so UPI could charge supracompetitive prices.
Operative theories shifted: the complaint alleged U.S. Steel exited the western market; after discovery Stanislaus advanced a "partial allocation" theory that U.S. Steel failed to price aggressively against UPI.
The district court granted summary judgment for defendants, finding U.S. Steel’s purported participation economically implausible under the factual contract structure (nationwide F.O.B. contracts) and the circumstantial evidence insufficient under Matsushita.
On appeal the Ninth Circuit reviewed de novo, applying the Matsushita standard for circumstantial antitrust proof and concluded Stanislaus failed to produce specific evidence that tended to exclude independent conduct.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether circumstantial evidence shows an illegal market-allocation agreement	Stanislaus: U.S. Steel agreed (via 2006 meetings) to stop competing in the West, enabling UPI to raise prices	Defendants: U.S. Steel’s nationwide FOB contracts and competitive incentives make exiting or soft‑pricing in the West irrational; observed conduct consistent with independent competition	No — evidence does not tend to exclude independent action; summary judgment affirmed
Whether U.S. Steel economically benefitted enough to participate in allocation	Stanislaus: U.S. Steel gained via UPI profit share and higher hot‑band charges	Defendants: U.S. Steel would lose by foregoing national sales; UPI profits unlikely to offset losses; other suppliers competed in West	No — participation by U.S. Steel economically implausible
Whether interfirm communications and internal emails constitute a “plus factor” supporting conspiracy	Stanislaus: Emails and UPI internal statements show knowledge and implied coordination	Defendants: Communications are ambiguous, reflect market conditions, and lack shown impact on U.S. Steel pricing decisions	No — communications ambiguous and do not show an effect excluding independent behavior
Admissibility/weight of plaintiff’s expert and evidence compilation	Stanislaus: Expert report and market analysis show allocation and anticompetitive effects	Defendants: Expert offered broad conclusions without specific, cited facts tying conduct to conspiracy	No — court reasonably declined to mine an 82‑page report without specific record citations; expert does not cure evidentiary gap

Key Cases Cited

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (circumstantial antitrust claims must present evidence tending to exclude independent action; implausible conspiracies require stronger proof)
Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984) (plaintiff must show evidence that tends to exclude independent action)
Palmer v. BRG of Ga., Inc., 498 U.S. 46 (1990) (per curiam) (territorial market allocation violates § 1)
United States v. Topco Assocs., Inc., 405 U.S. 596 (1972) (territorial allocations are per se illegal in certain contexts)
In re Citric Acid Litig., 191 F.3d 1090 (9th Cir. 1999) (framework for circumstantial proof and plus factors in antitrust cases)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard and discussion that firms do not enter every market; context matters in antitrust plausibility)
Carmen v. San Francisco Sch. Dist., 237 F.3d 1026 (9th Cir. 2001) (courts need not comb the record for facts not properly cited by a party)
In re Publ’n Paper Antitrust Litig., 690 F.3d 51 (2d Cir. 2012) (interfirm communications can be a plus factor when tied to pricing impact)