641 F.2d 457 | 7th Cir. | 1981
Lead Opinion
Plaintiffs appeal from the entry of summary judgment on their claim of a price-fixing conspiracy in violation of Sections 1 and 2 of the Sherman Act. The District Court concluded that after eight years of discovery plaintiffs had failed to produce any significant probative evidence to support the complaint.
This class action was initiated in 1970 by three charge cardholders in the Midwest Bank Card System, Inc. and its successor the Interbank-Master Charge Card System, Inc. (Mastercharge), against five Chicago banks. The plaintiffs alleged that defendants, Continental Illinois National Bank & Trust Company of Chicago (Continental), Harris Trust and Savings Bank (Harris), Pullman Bank and Trust Company (Pullman), Central National Bank in Chicago (Central), and American National Bank and Trust Company (American), conspired to fix the interest rate paid by consumer credit cardholders on extended payments at 1.5% per month, or 18% per annum.
This controversy arises out of the formation of the Midwest Bank Card System by the defendant banks. As the District Court noted, the circumstances surrounding the
In early 1966, First National Bank of Chicago held a meeting attended by representatives of Continental, Harris and the Northern Trust to discuss the establishment of a compatible credit card program. The idea of establishing a credit , card system was well received, and further meetings ensued. A representative of American also participated in these meetings as an observer.
The banks sought to establish a compatible credit card system. That is a system which permits a card issued by one bank to be used for purchases from participating merchants who deal with other banks. The card issuing bank provides the consumer with a plastic charge card. The cardholder agrees to pay his bank for monies advanced to cover purchases by the cardholder with the charge card. The cardholder can use the charge card to make purchases from any merchant who accepts the Midwest Charge card. The merchant simply forwards the signed charge ticket to his own bank, and is credited with the full amount of the charged purchase, less a small “discount” or fee. The merchant’s bank then receives a credit from the cardholder’s bank. At the end of each month the cardholder is billed by his bank for the total amount of purchases made during the period. The merchant’s bank generates revenues by charging the merchant a fee or “discount” for its services. If the cardholder pays his bank the full amount due within a specified period, he incurs no finance or interest charge. If he defers payment, however, his bank charges him interest on the unpaid balance. That interest rate, and how it was arrived at, is the subject of this controversy.
The Midwest Bank Card System, Inc. is a non-profit corporation established by the defendant banks, except American,
The defendant banks also contend that an important aspect of a compatible charge card system is the integration of correspondent banks into the system. A correspondent bank maintains a deposit balance with a larger Metropolitan bank. The Metropolitan banks, in turn, provide services to their correspondents. Since Illinois is a “unit banking” State, which limits the use of branch banks,
The initial meetings during the Spring and Summer of 1966, attended by representatives of defendants Continental and Harris, and by representatives of First and the Northern Trust, are outlined fully by the District Court and need not be restated here. See Weit v. Continental, supra, at 200-205. Continental and Harris were
From the outset the defendant banks were aware of the potential anti-trust problems inherent in a joint venture such as this. At an early meeting on May 26, 1966, lawyers for First raised the anti-trust issue. The group agreed at that time, on advice of counsel, to exclude from their discussion interest rates, fees, advertising, and market research. On July 25, 1966, Miles Seeley, counsel for Continental, submitted a memorandum to the group warning that discussions must be limited to planning a compatible credit card system and prohibiting any discussion of “fees, discounts, billing and extended credit terms.”
Nevertheless, plaintiffs argue, each defendant bank arrived at the same interest rate.
Plaintiffs argue that in addition to these factors which were considered by the District Judge, the lobbying efforts by the defendant banks also suggest the existence of a price fixing conspiracy. Those lobbying efforts were expressly not considered by the District Court.
When the Illinois General Assembly convened in 1967, several bills were introduced regulating interest charged on consumer credit cards. The general interest rate limit under the Illinois Usury Statute was 7% per annum. The Chief Counsel to the Illinois Comptroller
Plaintiffs contend that this evidence, provided by sworn affidavit or deposition, should at least create a genuine issue of material fact sufficient to defeat a defense motion for summary judgment under Rule 56, F.R.C.P.
The District Court found that the defendant’s parallel interest rate; the opportunity to conspire to fix those rates; the specific references to interest rates in the record; and the opinion of Professor Shull did not create a reasonable inference of the conspiracy which plaintiffs alleged. 467 F.Supp. at 210-211. In support of their motion for summary judgment, defendants, as they must, came forward with testimony under oath refuting plaintiffs’ allegations. This evidence showed that each defendant had independently projected the costs and early losses from the credit card system, and independently arrived at 1.5% per month as the minimum interest rate they could charge. The Court below noted that every employee of the defendant banks who participated in the formation of Midwest denied, under oath, that there had been any discussion relating to a fixed or agreed interest rate. The Court found that the parallel rates were not surprising since each defendant faced the “identical problems of fraud, credit losses, and large initial expense, to which reasonable businessmen would react in the same fashion.” 467 F.Supp. at 210-211.
Also, the Court noted that 1.5% per month was the rate then charged on other consumer credit cards and by retail establishments offering their own credit.
The Court found that defendants had shifted the burden to the plaintiffs to come forward with “significant probative evidence to support the complaint,” citing First National Bank of Arizona v. Cities Service, 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). The District Court concluded that, after more than eight years of discovery,
.. . plaintiffs have confronted every person who attended those meetings, examined the minutes of and documents generated by each meeting, and found no evidence which affirmatively supports their theory. 467 F.Supp. at 211.
SUMMARY JUDGMENT
Rule 56(c) provides that summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact ...” Rule 56(e) provides that when a motion for summary judgment is supported by sworn denials, as is the case here, the burden shifts to the plaintiff to “set forth specific facts showing that there is a genuine issue for trial.”
By entering summary judgment the Court is, in effect, concluding that based on the evidence upon which the plaintiff intends to rely at trial, no reasonable jury could return a verdict for the plaintiff.
In the instant case the District Judge reviewed the evidence in the record at the conclusion of a lengthy period of discovery and found no significant probative evidence of a conspiracy to fix interest rates. Based on our independent review of the record, we, too, are unable to uncover any such evidence, and conclude that further proceedings in this case would result in a waste of limited judicial time and resources.
Plaintiffs contend that circumstantial evidence in the record — parallel rates and the opportunity to conspire — are sufficient to meet their burden under Rule 56(e). Clearly, circumstantial evidence can be sufficient to support a finding of a price-fixing conspiracy. Interstate Circuit v. United States, 306 U.S. 208, 59 S.Ct. 467, 83 L.Ed. 610 (1939). Parallel business behavior or “conscious parallelism” is the type of circumstantial evidence .which, absent more direct evidence, will be relied on in inferring unlawful agreement. Theatre Enterprises v. Paramount Film Distributing Corp., 346 U.S. 537, 540, 74 S.Ct. 257, 259, 98 L.Ed. 273 (1954). However, when defendants come forward with denials sufficient to shift the burden under Rule 56(e), plaintiffs must come forward with some significant probative evidence which suggests that conscious parallelism is the result of an unlawful agreement. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289-90, 88 S.Ct. 1575, 1592-1593, 20 L.Ed.2d 569 (1962); Modern Home Institute, Inc. v. Hartford Accident and Indemnity Co., 513 F.2d 102 (2d Cir. 1975). Parallel behavior and the hope that something further can be developed at trial is not sufficient to warrant a trial on the merits. Cities Service at 290, 88 S.Ct. at 1593; Perma Research and Development Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969). Conscious parallelism in the instant case could support a wide range of inferences. One logical inference is that the ll/z% per month interest rate reflected a business decision as to what rate the market for consumer credit would bear, and eventually prove profitable as well. An equally plausible inference, and one supported in the record, is that the already established rate of consumer credit was lVz% per month, as reflected by Bank Americard and retail outlets offering installment credit.
Plaintiffs rely heavily on the opportunity to conspire as probative evidence of unlawful conspiracy. The dissent also attaches significance to the close personal ties among the members of the Chicago banking community. Yet, the mere opportunity to conspire,
It is suggested that while parallel pricing alone is not sufficient to establish a price-fixing conspiracy, such evidence together with an opportunity to conspire is sufficient to rebut defendants’ denials and require a trial on the merits. See C-O-Two Fire Equipment Co. v. United States, 197 F.2d 489 (9th Cir. 1952), cert. denied 344 U.S. 892, 73 S.Ct. 211, 97 L.Ed. 690 (1952); Esco Corporation v. United States, 340 F.2d 1000 (9th Cir. 1965).
Where circumstantial evidence is relied upon to establish the conspiracy or any other essential facts, it is not only necessary that all the circumstances concur to show the existence of such conspiracy and facts sought to be proved, but such circumstantial evidence must be inconsistent with any other rational conclusion.19
Pevely, as well as C-O-Two and Esco were criminal cases with differing standards of proof. Nevertheless, it is interesting that the court in C-O-Two distinguished Pevely on the basis of the product in question. The Court stated the milk (the alleged price-fixed product) “approaches fungibility.”
In the instant case, the product in question is consumer credit, or more fundamentally, the cost of borrowing money for a given period. The underlying product— money — is not only fungible, it is by defini-. tion an interchangeable medium of exchange. The defendants’ own cost of money is highly regulated and, on a given day and specified amount, the cost is uniform. Thus, it is hardly surprising, or significant, that the defendants charged a parallel interest rate
The showing of parallel behavior under these circumstances, where each bank faced identical problems of fraud, credit losses, and large initial expense to which reasonable businessmen would react in the same fashion, does not provide a basis for the inference of the conspiracy which plaintiffs allege.23
Thus, parallel interest rates, together with evidence that the opportunity to conspire existed — when measured against defendants’ denials, parallel economic cost factors, and the need for a compatible charge card system — does not support a rational inference of an unlawful conspiracy.
This Circuit has recognized that “the very nature of anti-trust litigation would encourage summary disposition .. . when permissible.” Lupia v. Stella D’Oro, 586 F.2d at 1167. The statutory remedy of treble damages creates a “special temptation for the institution of vexatious litigation.” Id., citing Poller, 368 U.S. at 478, 82 S.Ct. at 493 (Harlan, J., dissenting). Also, anti-trust actions have proven to be especially protracted, and difficult for jury consideration. See United States v. United Gypsum Co., 438 U.S. 422, 465-469, 98 S.Ct. 2864, 2887-2889, 57 L.Ed.2d 854 (1978); ILC Peripherals Leasing Corporation v. International Business Machines Corporation, 458 F.Supp. 423, 445-448 (N.D.Cal.1978). Indeed, in the ILC case the District Judge, after a five month trial which ended in a deadlocked jury and a mistrial, concluded that the case was “beyond the ability and competency of any jury to understand and decide rationally.” 458 F.Supp. at 448.
We simply cannot turn our heads and ignore the practical realities of complex anti-trust litigation. A trial of this nature places a substantial burden on jurors who are seldom prepared to analyze the complexities of anti-trust claims.
When a District Court has afforded the parties eight years of unlimited discovery, the parties have designated the evidence on which they will rely at trial, and the Court has had an opportunity to review the evidence and concludes that no reasonable jury could return a verdict for plaintiffs, judicial economy mandates that summary judgment be entered. See e. g. Modern Home Institute, Inc. v. Hartford Accident & Indemnity Co., 513 F.2d 102 (2d Cir. 1975). A trial on such claims would serve only as a forum for impeachment and argument by counsel; not for the presentation of evidence. If the District Court, on the eve of trial, concludes that extensive and complete discovery has produced no evidence to support the complaint, summary judgment should be entered. As the Court noted in Cities Service:
While we recognize the importance of preserving litigants’ rights to a trial on their claims, we are not prepared to extend those rights to the point of requiring that anyone who files an anti-trust complaint setting forth a valid cause of action be entitled to a full-dress trial notwithstanding the absence of any significant probative evidence tending to support the complaint. 391 U.S. at 290, 88 S.Ct. at 1593.
We believe the instant case is precisely the kind contemplated by the Court in Cities Service. The allegations have been met with consistent sworn denials and there has been a more than adequate period of discovery. Yet, plaintiffs can point to only two instances where interest rates were even discussed, and then only in the context of state usury laws, or the rate that Bank Americard was charging.
Plaintiffs suggest that Cities Service is inapposite because that case involved a claim of refusal to deal rather than price fixing.
The dissent suggests that in the instant case, unlike in Cities Service, plaintiff has produced evidence of motive. It is suggested that this motive evidence distinguishes Cities Service from this case. In Cities Service the plaintiff
Plaintiffs rely, as does the dissent, on Poller v. Columbia Broadcasting, 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962) in support of the contention that issues of anti-competitive intent are particularly appropriate for jury consideration. The Court in Cities Service noted several factual distinctions between that case and Poller which could be applied in the instant case as well.
EVIDENCE OF LOBBYING ACTIVITIES
Plaintiffs also contend that the District Court erroneously declined to consider the evidence of defendants’ lobbying activities, and that had that evidence been considered, summary judgment should have been denied. The dissent concurs in that view.
The argument for admissibility of this evidence is that it is relevant to the question of whether defendants conspired to fix interest rates. As the dissent points out, an inference can be drawn that the banks would not have worked together in lobbying for passage of a bill in the legislature unless they had implicitly agreed on an interest rate as well. We agree that such an inference could be drawn. Our problem with this evidence is that it more directly suggests an agreement to influence legislators on behalf of a particular bill under consideration. In Eastern Railroads Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961), the Court held that such conduct does not violate the Sherman Act, even though there may be an anti-competitive motive behind such conduct.
Joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition. Such conduct is not illegal, either standing alone or as part of a broader scheme itself, violative of the Sherman Act.36
The District Court noted that such conduct is immunized from anti-trust liability under the Noerr-Pennington doctrine, but stopped short of excluding it on that basis.
Rule 403 of the Federal Rules of Evidence permits the Court to exclude relevant evidence “if its probative value is substan
THE ALLEGED VERTICAL CONSPIRACY
Plaintiffs also claim that Continental, Harris, Central and Pullman conspired between themselves and their correspondent banks to fix interest rates charged to consumers and discount rates charged to merchants, in violation of Section 1 of the Sherman Act. The District Court entered summary judgment on the claim of vertical price-fixing by Continental in its Order of December 22, 1978. 467 F.Supp. 214-216. The rationale for entry of summary judgment was that the plaintiffs, in the face of sworn denials by Continental, had failed “to produce any significant probative evidence .. . that a conspiracy existed.” Id. at 216, citing Lamb’s Patio Theatre v. Universal Film Exchanges, 582 F.2d 1068, at 1070. The District Court entered summary judgment for defendants Harris and Central in its order of September 6, 1979.
With regard to plaintiffs’ claims against Pullman, the Court found that there were sufficient “plus factors” to withstand summary judgment. However, plaintiffs had no standing to raise a claim against Pullman since they were not cardholders of the
The District Court has given a comprehensive summary of the role played by correspondent banks and their relationship to the named defendant banks which need not be recapitulated here.
Defendant Continental supported its motion for summary judgment by affidavits of its Vice President in charge of correspondent banking to the effect that no agreement to set rates existed between Continental and its correspondents because Continental a lone set the interest rate charged on all charge cards issued through its correspondents. The standard contracts between Continental and its correspondents support that position. The. only fact which could provide any support for any anti-trust theory was that Continental and its correspondents did not compete for charge card customers. That alone does not create an inference of conspiracy. To the contrary, in light of the evidence demonstrating the high costs of the Midwest System, the more reasonable inference is that the correspondents did not compete because they were not in a financial position to do so. The evidence before the District Court shows that Continental set the terms and conditions of its credit card — including the interest rate it would charge cardholders — and conveyed that decision to its correspondents.
With regard to Harris, the District Court found that Harris simply purchased receivables generated by its correspondent banks until January of 1968. At that point Harris offered its correspondents an opportunity to share in the risk and profits or losses on receivables generated by the correspondents. From that point until late 1974, Harris, unlike Continental, let its correspondents decide on the interest rate charged to their customers. Harris required a 1.5% return on its share of those receivables at first, but changed to a set fee paid by the correspondents. At no point during this period did Harris require its correspondents to charge any prearranged interest rate. In 1974 Harris switched to a system similar to Continental’s whereby Harris issued cards to those cardholders referred by its correspondent banks, and Harris alone set interest rates.
With respect to Central, the District Court found that it did not begin soliciting correspondent banks until 1970.
In the face of what the Court below found to be legitimate business relationships, plaintiffs are unable to point to any evidence of agreement or conspiracy. Here, as in the alleged horizontal conspiracy, plaintiffs can point only to the opportunity
STANDING TO MAINTAIN THE VERTICAL CONSPIRACY CLAIMS
The District Court noted that plaintiffs lack standing to complain of any injury resulting from Harris’ and Central’s relationship with their correspondent banks. Yet, the Court went on to find that even assuming standing to challenge the alleged vertical conspiracy plaintiffs had failed to point to any significant evidence of an agreement to fix interest rates between Harris and Central and their correspondent banks. Because we affirm the entry of summary judgment on that basis we need not address the standing question as it relates to Harris and Central. With regard to Pullman, however, the District Court dismissed the vertical conspiracy claim solely on the basis of standing. We, therefore, address the question of whether plaintiffs have standing to assert a vertical conspiracy claim against Pullman.
Section 4 of the Clayton Act, 15 U.S.C. § 15, permits anyone who has been “injured in his business or property” to maintain a private action for treble damages. As the Supreme Court’s opinion in Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977) indicates, the injury must be a direct one. In addition to this requirement of “antitrust injury,” a plaintiff in any lawsuit must show that he has sustained or is in immediate danger of sustaining some direct injury from the defendant’s actions. O’Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 675, 38 L.Ed.2d 674 (1974); Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). A plaintiff who does not have such a stake in the outcome lacks standing to maintain the action irrespective of the merits of the asserted claim.
The Court below noted, as has this Court, that the distinction between the “antitrust injury” requirement of Section 4 and the more general standing requirement is often blurred. 478 F.Supp. at 297. See also Lupia v. Stella D’Oro Biscuit Co., Inc., 586 F.2d at 1168-69. This is not surprising in antitrust actions as the two requirements overlap considerably. The labels are not important, however. The fundamental requirement is that plaintiffs establish a sufficient nexus between the defendant’s alleged actions and an injury to plaintiffs.
Here the plaintiffs are unable to establish that nexus. The named plaintiffs are cardholders of only Continental’s Midwest chargecards. The fact that they purport to represent Pullman cardholders who would have standing to complain of a vertical conspiracy between Pullman and its correspondents cannot create standing to bring an action. If plaintiffs lack the requisite stake in a controversy at the time the complaint is filed, they may not bootstrap that element into their claim by means of class action certification. Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 734 (3d Cir. 1970). Similarly, plaintiffs who have not suffered antitrust injury from an alleged conspiracy cannot bring themselves within the “target area” simply by purporting to represent those who are. See Lupia v. Stella D’Oro, 586 F.2d, at 1168-69. The District Court correctly concluded “the named defendants could not have been injured by any conspiracy between Pullman and its correspondents and lack standing to raise any claim against Pullman.” 478 F.Supp. at 299.
For the reasons set forth herein, the judgment of the District Court is AFFIRMED.
. Weit v. Continental Illinois National Bank and Trust Co., et al., 467 F.Supp. 197, 214 (N.D.Ill.1978); and Weit v. Continental Illinois National Bank & Trust Co., 478 F.Supp. 285, 298 (N.D.Ill.1979).
. First National Bank of Chicago (First) was named as a coconspirator, but not as a defendant in this action.
. “Pursuant to free market criteria and individual credit ratings.” Plaintiffs Third Amended Complaint, Count I, Prayer for Relief.
. American did not join the Midwest System until 1969.
. See Ill.Rev.Stat., Ch. 161/2, § 106.
. For example, State National Bank of Evans-ton was a correspondent of Harris, American, First, Continental and Northern. It affiliated with Continental’s charge card system in September of 1966.
. Krazley deposition ex. 8E; Prater deposition, ex. 50; excerpt from Prater deposition, app. 224-225.
. Id. at p. 225.
. Wood deposition, exhibit 6.
. While each bank charged a rate of 1.5% per month, the banks did not employ the identical method of calculating interest. For example, Continental computes interest on an “Adjusted Balance Method”, that is, by calculating interest on the balance due during the previous billing cycle to the date of a payment, and then computing interest on the remaining balance, if any, up to the current statement. Harris employs a “Closing Balance Method” whereby all payments received during a billing cycle are deducted from the previous balance. Central and American compute interest on the basis of an average daily balance during a given billing cycle. Pullman calculates interest on the basis of the balance due at the beginning of a billing cycle, without crediting for payments made. These differing methods of computation result in a slightly different cost of borrowing to the cardholder.
. Weit v. Continental, 467 F.Supp. at 207-208, Nt. 22.
. Defense counsel continually refer to this agency as the “Comptroller of the Currency”. We note that no such office exists, and under Article I, Section 8 of the U.S. Constitution could not exist.
. In plaintiffs’ answers to interrogatories filed January 6, 1978, plaintiffs identified the 964 documents and 53 witnesses on which they intended to rely at trial.
. The dissent suggests that plaintiffs produced evidence that Continental, Harris and Pullman knew the interest rates being contemplated by each other. This evidence is that Harris noted
. The record indicates that the Wall Street Journal, on May 24, 1966 noted Bank Americard’s interest rate of l‘/2% per month and that the defendants were aware of this. Ex. A to Continental’s response to Interrogatories, January 3, 1978, pp. 23-24.
. The District Court characterized the bulk of this evidence as falling into the “mere possibility range.” 467 F.Supp. at 211. We agree. The fact that the Chairmen of Harris and Continental both served as trustees of Northwestern University is of little relevance, much less probative value.
. We note that in both C-O-Two and Esco numerous co-defendants entered pleas of nolo contendere prior to the trial of these named co-defendants.
. 178 F.2d at 367. In Pevely the Court reversed the district court’s denial of a motion for judgment of acquittal after the jury returned a guilty verdict.
. C -O-Two, 197 F.2d at 496.
. In Bendix this Court overturned the trial court’s finding of improper price influencing for lack of evidence. In Independent Iron Works the Court affirmed the trial court’s directed verdict on a concerted boycott claim.
. As indicated at footnote 11 infra, the cost of borrowing to the cardholder is not identical at each bank due to the individual bank’s method of calculating interest.
. 467 F.Supp. at 210-11.
. When the Court in ILC asked the foreman of the jury whether this type of case should be tried to a jury, the foreman responded:
“If you can find a jury that’s both a computer technician, a lawyer, an economist, knows all about that stuff, yes, I think you could have a qualified jury, but we don’t know anything about that.” (Tr. 19,548), 458 F.Supp., at 447.
. Remarks of the Chief Justice of the United States, Meeting of Conference of Federal Chief District Judges, Little America Hotel, Flagstaff, Arizona, Aug. 7, 1979.
. The dissent attaches considerable significance to the use of the term “regular interest” rate in the discussions with Bank of America.
. Plaintiffs attempt to classify Cities Service as an “individual refusal to deal” case. It is not. The complaint alleged concerted conduct. Indeed, since Section 1 of the Sherman Act proscribes “every contract, combination ... or conspiracy in restraint of trade ...” individual conduct does not run afoul of Section 1, by definition.
. See Klors Inc. v. Broadway-Hale Stores, 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959); U. S. v. Socony Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940).
. The original plaintiff was Gerald Waldron. Upon his death the First National Bank of Arizona, his executor, was substituted as plaintiff. See Cities Service, 391 U.S. 253, 259 n. 1, 88 S.Ct. at 1578 n. 1.
. 391 U.S. at 277, 88 S.Ct. at 1586.
. Id.
. A Continental internal memo of August 11, 1966 noted, “if anyone goes in Chicago, others will and this may result in chaos in the market. Could be disasterous [sic] ...”
. A Harris internal memorandum of December, 1966 noted, “it would be very difficult for any one bank in Chicago to successfully operate a broad credit card plan in our area because of our unit banking system. And, even if tried, others would soon initiate similar and competitive plans resulting in a chaotic state of affairs . as far as the public and the merchants were concerned.”
. For example, the Court in Cities Service noted that in Poller a competitive relationship existed between the plaintiff and defendant. In both Cities Service and the instant case there is no competitive business relationship. 391 U.S. at 285, 88 S.Ct. at 1590.
. 365 U.S. at 140, 81 S.Ct. at 531.
. 381 U.S. at 670, 85 S.Ct. at 1593.
. 467 F.Supp., at 207-208 N. 22.
. Generally, the Rules of Evidence apply to pre-trial proceedings including summary judgment considerations. See F.R.E. 101; American Security Co. v. Hamilton Glass Co., 254 F.2d 889, 893 (7th Cir. 1958).
. The dissent suggests that 403 is designed to exclude only that evidence which tends to horrify, or evoke sympathy or anger. While the tendency to suggest an emotional decision is one basis for exclusion of evidence under Rule 403, it is clearly not the only one. Advisory Committee Notes quoted in Weinstein’s Evidence ' 403[03].
. 478 F.Supp. 285 (N.D.Ill.1979).
. For a discussion of Continental’s relationship with its correspondents, see the District Court opinion, 467 F.Supp. at 202-204, 215-216. Harris’ and Central’s correspondent relationships are detailed at 478 F.Supp. 290-294, 297-298. Pullman’s correspondent relationships are set out at 478 F.Supp. 290-291 and 297-299.
. See e. g. deposition of Alfred Lindgren, pp. 60-61 and depo., ex. No. 9.
. Such as the Bank Americard System which the First had become affiliated with.
. Central was itself a correspondent of both Continental and Harris.
Dissenting Opinion
dissenting.
Plaintiffs alleged that defendants, five Chicago banks, violated sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, by conspiring between themselves and with
I. THE STANDARD OF REVIEW
The issue before this court is whether this court is satisfied that a properly instructed jury, giving full weight to plaintiffs’ evidence, drawing every reasonable inference in its favor, and subjecting defendants’ evidence to a critical eye, could not rationally find that plaintiffs were entitled to any relief. Ambook Enterprises v. Time, Inc., 612 F.2d 604, 611 (2d Cir. 1979), cert. dismissed, - U.S. -, 101 S.Ct. 35, 65 L.Ed.2d 1179 (1980). See Continental Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 696, 82 S.Ct. 1404, 1409, 8 L.Ed.2d 777 (1962).
II. THE HORIZONTAL CONSPIRACY A.
As the majority and the district court noted, the circumstances surrounding the formation of Midwest in 1966 and its successor, Mastercharge, are not in dispute. Weit I, 467 F.Supp. at 199. The significance of plaintiffs’ evidence introduced in support of their allegations of a horizontal conspiracy is more readily apparent, however, when viewed in light of certain salient facts about the Chicago banking community and the credit card industry at the time of Midwest’s formation. Plaintiffs produced evidence to show the following.
In 1966, the Chicago banking market was an oligopoly dominated by First National Bank
Illinois had no credit card interest law in 1966. The Illinois usury statute in effect at that time, however, prohibited interest rates in excess of a 7% add-on per annum, (which Harris counsel said would proximate 14% annually), Ill.Ann.Stat. ch. 74, § 4 (Smith-Hurd 1966), and defendant Harris, a state bank, assumed that it would be bound by this statute. See Plaintiffs’ Ex. 1, quoted in Weit I, 467 F.Supp. at 200. The federal statute governing the nationally chartered banks (defendants Continental and Central, and First) provided that they could charge interest at the rate allowed by the laws of the state in which the bank is located. 12 U.S.C. § 85 (1976). In determining what state law it was bound by, defendant Continental looked to the Illinois Consumer Finance Act, Ill.Ann.Stat. ch. 74, § 19 et seq. (Smith-Hurd 1966), which applied to small consumer loans and allowed an interest rate of 3% per month on loans up to $150.00, or 36% per annum, 2% per month or 24% per annum on the balance of the loans exceeding $150 and not exceeding $300, and 1% per month, or 12% per annum, on any part of the unpaid balance exceeding $300. Id. at § 31. Continental interpreted this Act as allowing a Pk% per month, or 18% per annum maximum overall effective rate. Weit I, 467 F.Supp. at 201. Without attempting to resolve these seemingly conflicting positions, I assume throughout this opinion that the limitations on the two types of banks differed as the parties thought.
Defendant banks began discussing the idea of a joint charge card in 1966 so as to prevent competition from outsiders and to prevent any one Chicago bank from taking the lead in the new charge card market. Continental was afraid that outsiders would enter the market, resulting in chaos.
In the spring of 1966, then, when the subject of bank credit cards was “... in the
Lewis [of Harris, a state bank] commented that the maximum must be no more than the equivalent of 7% add-on per annum, or less than 14%. Foote [of Harris], who said he had looked into credit cards on his own for Harris some months ago, found specific revolving credit enabling legislation in other states where 1%% per month is in effect. Wood [of First] commented that this is troubling First’s lawyers, too.
Plaintiffs’ Ex. 1, quoted in Weit I, 467 F.Supp. at 200. Representatives of the four banks met again on May 26, 1966. The minutes of this meeting state that “Wood [of First] said the First’s lawyers had two legal questions — rate and anti-trust — and the anti-trust seemed to be the easier of the two.” Id. The group began meeting regularly after this. American was not a formal participant, but sent a representative. Central, a correspondent bank of both Harris and Continental, did not participate in these early meetings, but received status reports on the formation of a compatible system.
During these early meetings, the group determined that card design, imprints and forms would be uniform, and that a participating merchant directory, a list of can-celled or stolen cards, and a merchant instruction booklet would be jointly issued. Weit I, supra at 200. They also agreed that their correspondent banks could retain their relationship with local merchants in return for soliciting card holders. Id. at 203. Without this latter agreement, the four banks would have solicited correspondents’ customers directly, provoking the correspondents into forming their own bank credit card systems, thereby diluting the market. Id.
In late June, 1966, officers of First, Continental, Harris and Northern flew to San. Francisco to consult with the Wells Fargo Bank about the Western States Bank Card Association.
In July, 1966, the four banks retained Information Sciences Associates, a consulting firm with experience in the formation of charge card systems. Id. at 200. Later that month, Continental personnel received a memorandum dated July 25, 1966 from Miles G. Seeley, senior partner of Mayer, Brown & Platt, counsel for Continental, limiting discussions with other banks to the subject of planning a compatible card system and specifically forbidding any “discussion (even in jest)” of “... [f]ees, discounts, billing and extended credit terms or any other economic terms of the relationship between any bank and its own credit cardholders.”
During this time, defendant Pullman was going ahead with plans to issue its own charge card. Pullman intended to announce its card, which was to have an interest rate of 18% per annum, on August 12, 1966, and the program was to begin on November 7, 1966. Weit II, 478 F.Supp. at 288-90. The other banks knew about Pullman’s plans. A description of the Pullman credit card program, including the cardholder interest rate, appeared in the feasibility study prepared by Continental in July, 1966,
On September 8, 1966, Continental announced its plans for an all purpose charge card.
Continental, Harris and First continued to inform Pullman of their plans. Finally, in the fall of 1966, Pullman joined the group. Id. at 289-90. Mr. Murphy, a Pullman officer who became president of Midwest in 1967, testified that Pullman joined Midwest “[bjecause we were concerned ... that we were going to have competing bank card systems. ... And also, that we were a failure.” Id.
Central decided to join the group at this time as well. Although it had not participated in or sent a representative to the formal study group meetings, a Central vice-president had attended a presentation on interbank charge card transfers held in late August. Id. at 288. Central also knew of Pullman’s plans. Id. Central officers assumed they would charge the maximum legal interest rate, which their counsel had advised was 18% per annum, or l'A% per month. Id.
On October 24, 1966, First, Continental, Harris, Central and Pullman signed the “interim agreement” establishing the Midwest charge card system. Weit I, 467 F.Supp. at 202. The agreement mandated certain requirements for all membership banks: uniform floor limits; uniform cash advance limits; uniform merchandising return procedures; uniform advertising limitations; uniform transaction reporting procedures; and uniform card format and design. Id. It did not mention charge card holder interest rates. By this time, however, each defendant, with the exception of American
When the Illinois General Assembly convened in 1967, the Midwest group hired William Dillon, a lawyer and professional lobbyist, to lobby for a credit card interest bill and represent the banks before the Illinois legislature.
Although American had attended the Midwest organizational meetings in 1966, it did not get into the charge card business until 1968. It then hired James Kennedy, who ran the charge card program at Continental, to establish the program for American. Weit I, 467 F.Supp. at 204. American joined Midwest in the spring of 1969, charging the (by now) standard cardholder interest rate of 18% per annum. Id. Midwest joined the Interbank Card Association, Inc. (Mastercharge) that year as well. Id. at 205. In 1970, First left the Midwest system, joined Bank Americard, and began soliciting the defendants’ correspondent banks for the first time. Id.
When plaintiffs first filed suit in 1970, defendants were still charging an interest rate of 18%, the same rate being charged today.
Defendants, in their motion for summary judgment, introduced affidavits by and depositions of their officers denying the existence of an agreement and giving business reasons for arriving at the 18% per annum charge card holder interest rate. David M. Kennedy, chairman of the Board of Directors, for Continental, stated that during the summer of 1966, he determined that Continental’s charge card should carry the highest interest rate legally permissible so as to make the system, for which Continental projected early high losses, profitable as soon as possible. Weit I, 467 F.Supp. at 201. Harris Bank’s senior vice-president, Carroll E. Prater, also testified that Harris decided to charge the maximum legal rate because “it was an expensive business to get into ... losses were very high.” Id.
Pullman officers stated that they arrived at an interest rate of 1%% per month based on their prior experience in the charge card business. Weit II, 478 F.Supp. at 289. Even at that rate, they did not expect the charge card program to be profitable for several years. Id. Frank Bauder, chairman of Central, testified that by the time Central decided to join Midwest in September of 1966, the l!/2% per month interest rate was taken for granted as necessary to cover costs. Id. at 288. James Kennedy, American’s second vice-president in charge of the bank’s charge card operations, gave similar reasons for American’s decision to charge llh% per month. Weit I, 467 F.Supp. at 204.
Defendants also argued that it was public knowledge that Bank Americard and other
B.
Under Rule 56(e) defendants’ denials were sufficient to shift the burden to plaintiffs to produce some significant probative evidence tending to support their complaint. First National Bank of Arizona v. Cities Service, 391 U.S. 253, 289-90, 88 S.Ct. 1575, 1592-1593, 20 L.Ed.2d 569 (1968). The critical question then becomes whether plaintiffs presented enough evidence so that a rational trier of facts could find that this uniform interest rate resulted from an agreement among and between defendants rather than from independent identical decisions by individual bankers. See Ambook Enterprises v. Time, Inc., 612 F.2d 604, 613 (2d Cir. 1979), cert. dismissed, - U.S -, 101 S.Ct. 35, 65 L.Ed.2d 1179 (1980). In order to infer such an agreement, there must be more than merely parallel business conduct. See Theatre Enterprises, Inc. v. Paramount Film Distributing Corp., 346 U.S. 537, 541, 74 S.Ct. 257, 259, 98 L.Ed. 273 (1954). I think that plaintiffs did present evidence of more than merely parallel conduct, from which a jury could rationally conclude that defendants Continental, Harris, Pullman and Central agreed on uniform interest rates.
First of all, plaintiffs produced evidence showing that defendants Continental, Harris and Pullman knew the interest rates being contemplated by each. At the very first formal meeting of the group, which representatives of Continental and Harris attended, Harris officers stated they were afraid they may be bound by the Illinois usury limits, but that other states had enabling legislation allowing an interest rate of F/2% per month. From this statement it can be inferred that Harris hoped to charge Ph% per month. Then, in late June, 1966, officers of defendants Continental and Harris, along with representatives of First and Northern, met with the president of Bank Americard and discussed what Continental officers termed the “regular Ph% per month interest charge.” (Emphasis added.) From this statement it can be inferred that Continental was planning on charging 1%% per month interest.
This exchange of information regarding the “regular” interest rate and the interest rate being charged by Pullman is analogous to “[a] knowing wink [which] can mean more than words” in determining whether defendants agreed to fix prices. Esco Corp. v. United States, 340 F.2d 1000, 1007 (9th Cir. 1965). In Esco, the court held that an exchange of price information at a meeting called by Esco Corporation’s largest competitor was sufficient evidence, when combined with price uniformity, for inferring a price fixing conspiracy:
[S]uppose five competitors meet on several occasions, discuss their problems, and one finally states — “I won’t fix prices with any of you, but here is what I am going to do — put the price of my gidget at X dollars; now you all do what you want.” He then leaves the meeting. Competitor number two says — “I don’t care whether number one does what he says he’s going to do or not, nor do I care what the rest of you do, but I am going to price my gidget at X dollars.” Number three makes a similar statement— “My price is X dollars.” Number four says not a word. All leave and fix “their” prices at “X” dollars.
*476 We do not say the foregoing illustration compels an inference in this case that the competitors’ conduct constituted a price-fixing conspiracy, including an agreement to so conspire, but neither can we say, as a matter of law, that an inference of no agreement is compelled.. .. [I]t remains a question for the trier of fact....
Id.
Here, defendants Continental and Harris said they wouldn’t fix prices,
Plaintiffs introduced no evidence indicating that defendant Central exchanged any interest rate information with defendants Continental, Harris and Pullman. Yet when Central joined Midwest in the fall of 1966, it charged the same interest rate as discussed by the other defendants, even though it could have charged the higher rate allowed to National banks. It is not necessary for each defendant to have participated in every act of the conspiracy in order to be charged with such, as long as they had a common purpose connecting their acts. See Esco Corp. v. United States, supra, 340 F.2d at 1006. Here, Central participated in other activities from which its participation in the conspiracy can be inferred.
The district court judge did not consider the joint lobbying activities by defendants Continental, Harris, Central and Pullman,
While defendants’ united support of the 18% per annum interest rate is not in itself illegal under Eastern Railroads Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961),
Another factor contributing to the evidence from which an agreement to fix interest rates may rationally be inferred is defendants’ express agreement to standardize everything about their charge cards other than marketing strategy and interest rates. Defendants admitted that “[h]omogeneity was legislated into the product by edict. In fact, this identity is the philosophic heart and soul of the compatible agreement each bank must sign to gain admission into the system.”
In a competitive industry, such standardization could perhaps enhance price competition. L. Sullivan, Antitrust § 98 at 276 (1977). But in an oligopoly, and plaintiffs have shown that the Chicago banking industry may be fairly characterized as such, non-price competition is valuable, and anything tending to standardize non-price terms harms competition. Id., § 99 at 279. The Ninth Circuit recognized this harm in C-O-Two Fire Equipment Co. v. United States, 197 F.2d 489 (9th Cir. 1952), when it stated that product standardization of a product that is not naturally standardized facilitates the maintenance of price uniformity. Id. at 493. Thus, product standardization was another factor, in addition to parallel conduct, from which a conspiracy to fix prices could be inferred. Id.
Here, under competitive conditions, credit card characteristics would have changed as independent banks experimented with one or another promotional features and cardholders and merchants gave their business to the banks offering the most attractive combination.
Plaintiffs also introduced evidence of defendants’ opportunity to conspire. Aside from the formal study group meetings, which representatives of Continental, Harris and American attended, and of which Central and Pullman were kept informed, defendants’ officers met informally on numerous occasions. Opportunity to conspire, standing alone, is insufficient for inferring a conspiracy. It may be considered, however, in determining whether all of the evidence, in addition to parallel behavior, warrants an inference of common, rather than individual conduct. L. Sullivan, Antitrust, § 110 at 317 (1977). Evidence of meetings between defendants, presenting an opportunity to conspire, were plus factors in finding a price-fixing agreement in C-O-Two Fire Equipment Co. v. United States, even though there was no evidence of what was discussed. C-O-Two Fire Equipment Co.,
As in so many other instances, it remains a question for the trier of fact to consider and determine what inference appeals to it (the jury) as most logical and persuasive, after it has heard all the evidence as to what these competitors had done before such meeting, and what actions they took thereafter, or what actions they did not take.
Id. at 1007.
Defendants denied any discussion of interest rates at these formal and informal meetings. But the fact of their meetings, combined with their knowledge of the interest rates to be charged by fellow defendants, their decision to lobby together in the legislature for an 18% rate and their express agreement on non-interest aspects of their parallel conduct, provide sufficient evidence from which a jury could infer that interest rates were in fact discussed. The jury should have the opportunity to decide for itself that defendants’ denials are more credible than plaintiffs’ circumstantial evidence of an agreement.
Finally, plaintiffs introduced evidence of defendants’ motive to conspire. It was plaintiffs’ inability to show a motive to agree and benefits obtained through the agreement which led the Supreme Court to affirm a summary judgment for defendants in First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 287, 88 S.Ct. 1575, 1591, 20 L.Ed.2d 569 (1968). In the present case, defendants admitted the motive for doing exactly what they are accused of: defendant officers testified that they were afraid of aggressive competition in the new market for credit cards, which they thought would result in chaos. If someone entered the market at a lower rate, which Harris thought it may have been forced to do, given the state usury laws, the other defendants may have marketed their cards at a lower rate as well. None of the banks wanted to face this possibility as they were afraid of large losses in starting the new program.
Defendants introduced independent business reasons to explain their decisions to charge an 18% per annum interest rate. It is up to the jury, however, and not the trial judge, to decide which explanation for defendants’ action is more reasonable. See Continental Baking Co. v. United States, 281 F.2d 137, 143-46 (6th Cir. I960).
Defendants emphasize that they were warned at an early stage of potential antitrust violations and that their lawyers monitored the study group meetings to ensure compliance. This information should not be dispositive of defendants’ evidence. First of all, there is no evidence that the warning was given before defendants started discussing charge card programs on a regular basis. To the contrary, the evidence shows that the warning wasn’t given until July 25, 1966, almost two months after defendants began meeting formally, and one month after 18% — or llh% per month — had become “the regular interest rate.” Secondly, lawyers were not present every time defendants met: no lawyer was with the officers of Harris and Continental on their cross-country trip to meet with the president of Bank Americard to discuss “the regular” interest rate, nor was a lawyer present when officers of Continental had dinner with the president of Pullman.
Most importantly, these defendants and future sophisticated defendants should not be allowed to escape allegations of illegal conspiracies as easily as by leaving a paper trail drafted by their lawyers. No conspirator today is going to publicly agree to joint action, nor are they going to leave a written record of their agreement. Instead, conspirators are likely to go to great pains to conceal their agreement, and a lawyer’s memorandum would accomplish just this.
In sum, plaintiffs have rebutted Continental’s, Harris’, Pullman’s and Central’s denials with evidence of more than the merely conscious parallelism held insufficient to withstand a summary judgment in Cities Service, supra, 391 U.S. at 290, 88 S.Ct. at 1593. They produced evidence that Continental, Harris and Pullman communicated directly regarding the interest rates each was going to charge; Continental, Harris, Pullman and Central took joint action on legislation regarding legal interest rates and on most other aspects of the charge card system; and that all four banks had a motive to agree to fix interest rates. All of these factors have been held sufficient, when combined with a showing of parallel behavior to withstand motions for summary judgment. See De Jong Packing Co. v. United States, 618 F.2d 1329, 1334 (9th Cir.), cert. denied,-U.S.-, 101 S.Ct. 783, 66 L.Ed.2d 603 (1980); L. Sullivan, Antitrust § 110 at 316 (1977). Plaintiffs, having presented evidence from which an agreement to fix prices may rationally be inferred, should be given a chance to present their case against these four defendants to a jury.
On the other hand, plaintiffs presented significantly less evidence regarding defendant American’s participation in the horizontal conspiracy. American did send a representative to the formal group meetings, but there is little other evidence that it met with the other defendants on a formal or informal basis. It did not participate in drawing up the formal agreement, nor did it sign the agreement with the other defendants. It did not participate in the lobbying activities with other defendants. Most important, it did not have the motive to conspire to set an 18% interest rate as did the other defendants. By the time American issued its charge card, the 18% credit card interest rate legislation had been in effect for two years. Every other bank seemed firmly set in its pattern of charging an 18% interest rate. Thus, American did not have to worry about being undercut by its competitors, and was free to set the rate it felt would be best for recouping start-up costs and initial losses. Plaintiffs did not introduce sufficient evidence of American’s role in the conspiracy and motive to conspire to overcome American’s denial of price fixing.
III. THE VERTICAL CONSPIRACY
I agree with the majority’s decision affirming the summary judgments granted defendants Continental, Harris and Central regarding the alleged vertical conspiracies with their respective correspondents. I also agree that if there were no horizontal conspiracy, plaintiffs would lack standing to assert a vertical conspiracy claim against defendant Pullman.
. The district court’s opinion granting summary judgment for defendants Continental, Harris . and American as to the charges of horizontal conspiracy and for Continental as to the charge of vertical conspiracy is reported in Weit v. Continental Ill. Nat'l Bank & Trust Co., 467 F.Supp. 197 (N.D.Ill.1978) (hereinafter “Weit /’’). The decision granting summary judgment for defendants Central and Pullman on both the horizontal and vertical conspiracy claims and for defendant Harris on the vertical conspiracy claim is reported at Weit v. Continental Ill. Nat’l Bank & Trust, 478 F.Supp. 285 (N.D.Ill. 1979) (hereinafter “Weit II”).
. On appeal from a grant of summary judgment, the appellate court is to review the record and determine for itself whether there are any genuine issues of material fact. 6 Pt. 2 Moore’s Federal Practice *' 56.27[1], at 56-1555 (2d Ed. 1980).
. First was named as a non-defendant co-conspirator in Counts I and III of plaintiffs’ third amended complaint. Although First was a founding member of Midwest, it left Midwest and joined the Bank Americard System in 1970. Weit I, 467 F.Supp. at 200 n. 3.
. Shull Aff. at 2.
Defendants Harris and Pullman are state chartered banks, and defendants Continental and Central are nationally chartered banks, as is First National Bank.
. lll.Ann.Stat. ch. 1672, § 106 (Smith-Hurd Supp.1980).
. Shull Aff. at 3.
. Deposition of Kenneth V. Zweiner at 17.
. Deposition of David M. Kennedy at 64-65.
. Deposition of James R. Kennedy at 357.
. Deposition of Arthur Stump at 40, 76-77.
. A memorandum by Thomas G. Patterson to John B. Tingleff, both Continental officers, stated “[Valley National Bank, Phoenix] believes that if anyone goes in Chicago others will and this may result in chaos in the market. Could be [disastrous].” Weit /, 467 F.Supp. at 200.
. Plaintiffs’ Ex. 6: Feasibility Study — Continental Illinois Nat’l Bank & Trust, Co., dated July 1966, at 45-46.
. Deposition of Sheldon Swope, Vice-President of Continental, at 45.
. Deposition of Allen Stults, president of American, at 24-25.
. Northern participated in the original planning sessions, but dropped out of the program in August, 1966. Weit I, supra at 200, n. 4.
. Deposition of Frank Bauder at 37; Defendants’ Ex. D9 and Dll.
. Plaintiffs’ Ex. 93 and 140.
. Memorandum of Robert K. Miller to John Tingleff, dated July 14, 1966, Ex. A to Defendant Continental’s Answers to Plaintiffs’ Interrogatories, filed November 11, 1977 at pp. 23-24.
. Prater Deposition, Ex. 50; Kranzley Deposition, Ex. 8E.
. Deposition of John Mattmiller (Northern), at 39-42.
. Plaintiffs’ Ex. 6 at 43.
. Lindgren Deposition, Ex. 2.
. Defendants’ Ex. A6; Prater Deposition, Ex. 55 and 56.
. Defendants’ Ex. A6.
. Prater Deposition, Ex. 55.
. Prater Deposition, Ex. 56.
. Prater Deposition, Ex. 55.
. American did not join Midwest until 1969, although a representative of American attended the group meetings. Weit I, 467 F.Supp. at 202.
. Ill.Ann.Stat. ch. 74, § 31 (Smith-Hurd, 1966).
. Ill.Ann.Stat. ch. 74, § 4 (Smith-Hurd, 1966).
. Appellants’ brief at 65, citing Plaintiffs’ Ex. 105 and 733.
. Deposition of William Dillon at 13.
. Dillon Deposition, Ex. 19 and 15A.
. Dillon Deposition, Ex. 16A.
. Dillon Deposition at 210-11; Ex. 6 and 9.
. Ill.Ann.Stat. ch. 74, § 4.2 (Smith-Hurd Supp. 1980).
. It can also be inferred from this statement that Continental was saying “this is the only rate a bank should charge.” It is interesting to note that Continental referred to 18% as the “regular” interest rate several months before it consulted with Robert Bloom, Chief Counsel to the Comptroller of the Currency, The United States Treasury, regarding its interpretation of the Illinois Consumer Finance Act, Weit I, 467 F.Supp. at 201.
. Continental circulated the Seeley memorandum forbidding the discussion of interest rates to other Midwest banks, including Harris. See nn. 19 and 20, and accompanying text, supra.
. Defendants argue that it was common knowledge that l‘A% per month was the “regular” interest rate. This does not prevent them from agreeing to charge that rate, however.
. These four defendants were Midwest members when Midwest hired William Dillon.
. Plaintiffs did not allege that this activity in and of itself constituted an illegal conspiracy. Rather, they introduced it as evidence of the alleged agreement between defendant banks to fix the interest rate of 18%. This evidence thus falls within an exception to the Noerr rule being the “established rule of evidence that testimony of prior or subsequent transactions, which for some reason are barred from forming the basis for a suit, may nevertheless be introduced if it tends reasonably to show the purpose and character of the particular transactions under scrutiny.” United Mine Workers of America v. Pennington, 381 U.S. 657, 670 n. 3, 85 S.Ct. 1585, 1593, n.3, 14 L.Ed.2d 626 (1965).
. Egan Deposition, Ex. 16 at 99.
. Shull Aff. at 5.
. Shull Aff. at 6.
. The district court distinguished C-O-Two from the present case by saying that a finding of conspiracy was warranted in light of other factors: identical bids, unnecessary product standardization, illegal licensing contracts, dealer policing, and identical price increases at times of surplus, coupled with the fact that the defendants offered no rebuttal evidence. Weit I, 467 F.Supp. at 214. Admittedly, plaintiffs in this case have not made as strong a showing of conspiracy as did the government in C-O-Two. But this case is not a challenge to the legal sufficiency of the evidence for a criminal conviction. All that is necessary to withstand a motion for summary judgment, which is the only issue at this point, is a showing of at least one other factor, in addition to parallel pricing, from which a jury could infer an agreement. L. Sullivan, Antitrust § 110, at 317 (1977). Plaintiffs have shown at least three such factors, and their opportunity evidence merely contributes to the overall picture.
. At the same time, defendant Continental, which thought it was bound by the Illinois Consumer Finance Act, gave up the opportunity to charge a higher interest rate — 36% per annum on balances up to $150 — which would have enabled it to recoup its projected losses much more quickly. Such an apparent contradiction in self interest “strengthens considerably the inference of conspiracy.” Milgram v. Loews, Inc., 192 F.2d 579, 583 (3rd Cir. 1951).
. In Continental, the government charged Continental with participating in a price fixing conspiracy and introduced evidence showing that defendants met prior to each price increase. As in Weit I, the government did not introduce any evidence of a specific agreement. The trial judge decided for himself that there was an agreement, and consequently refused defendants the opportunity to present evidence of economic factors leading to these price increases. The Sixth Circuit reversed, stating that it was up to the jury to determine whether
. It is true that defendants’ credibility in the present case is not at issue in the same way in which it was at issue in Poller. There, the issue was defendants’ intent, as their actions in cancelling plaintiffs’ affiliation contract and then buying its equipment would have been legal unless done with an intent to monopolize. CBS, in its motion for summary judgment, presented “substantial evidence tending to show the nonexistence of conspiratorial behavior.” Cities Service, supra, 391 U.S. 253, 285, 88 S.Ct. 1575, 1590, 20 L.Ed.2d 569 (discussing the difference between Poller and Cities Service). Nonetheless, the Court held that the denials of unlawful intent by “interested parties,” Poller, supra, 368 U.S. at 468, 82 S.Ct. at 488, were insufficient to rebut plaintiffs allegations of conspiracy for purposes of granting a summary judgment. Id. at 473, 82 S.Ct. at 491.
. I am not implying that defendants’ lawyers participted in a cover-up. Defendants could easily have discussed forbidden subjects in their informal meetings, however, while scrupulously obeying their lawyers during formal sessions.