Lead Opinion
OPINION OF THE COURT
This appeal involves an alleged conspiracy to fix prices in the titanium dioxide industry in violation of Section 1 of the Sherman Act. Appellant Valspar, a purchaser of titanium dioxide, claimed Appel-lee DuPont conspired with other titanium dioxide suppliers to fix prices. Valspar argued that the price-fixing agreement was made manifest primarily by thirty-one parallel price increase announcements issued by the suppliers. DuPont countered that the parallel pricing was not the product of an agreement, but rather the natural consequence of the marketplace. Specifically, DuPont posited that because the market for titanium dioxide is an oligopoly, the price movement was caused by “conscious parallelism”—an economic theory that explains oligopolists will naturally follow a competitor’s price increase in the hopes that each firm’s profits will increase. The District Court agreed with. DuPont and granted its motion for summary judgment. We will affirm.
I
The facts of this case were essentially undisputed in the District Court. The parties agree that the market for titanium dioxide is an oligopoly. Titanium dioxide is a commodity-like product with no substitutes, the market is dominated by a handful of firms, and there are substantial barriers to entry.
Valspar, a large-scale purchaser of titanium dioxide, alleges that a group of titanium dioxide suppliers conspired to increase prices. It claims that the conspiracy began when DuPont—the largest American supplier—joined the Titanium Dioxide Manufacturers Association (TDMA) in 2002, when the association opened participation to non-European companies; Shortly after joining the TDMA, DuPont announced a price increase. Within two weeks, DuPont’s price - increase was matched by Millennium, Kronos, and Huntsman (other TDMA members and members of the alleged conspiracy). This' began what Valspar alleged to be the “Conspiracy Period”—twelve years during which the alleged conspirators announced price increases 81 times.
Valspar claims the conspiracy ended in late 2013 when DuPont exited the TDMA. According to Valspar’s ‘ calculations, the conspirators inflated the cost of titanium dioxide by an average of 16%. Because Valspar purchased $1.27 billion of titanium dioxide from DuPont during the relevant period, it claims it was overcharged to the tune of $176 million.
II
In 2010, a class of titanium dioxide purchasers filed a price-fixing action against the suppliers in the United States District Court for the District of Maryland. Vals-par opted out of that class and the remaining defendant suppliers' settled the case after they were denied summary judgment. See In re Titanium Dioxide Antitrust Litig., 959 F,Supp.2d 799, 832 (D. Md. 2013). Valspar then filed its' own claim in the United States District Court for the District of Minnesota, which was subsequently severed. Valspar settled all claims except this one against DuPont, which was transferred to the United States District Court for the District of Delaware, where DuPont moved for summary judgment. Although presented with “substantially the same record ... as in the Maryland Class Action,” the District Court reached a “different conclusion.” Valspar Corp. v. E.I. Du Pont De Nemours,
III
The District Court had jurisdiction under 28 U.S.C. § 1331. We have appellate jurisdiction under 28 U.S.C. § 1291. Our standard of review is intertwined with substantive antitrust law and the parties dispute its contours. We therefore begin by reviewing the applicable law.
A
Section' 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade.” 15 U.S.C. § 1. Unlike § 2- of the Sherman Act, which addresses monopolization and other illegal unilateral conduct, § 1 applies only when there is an agreement to restrain trade; so a single firm’s independent action, no matter how anticompetitive its aim, does not implicate § 1. Monsanto Co. v. Spray-Rite Serv. Corp.,
Oligopolies pose a special problem under § 1 because rational, independent actions taken by oligopolists can be nearly indistinguishable from horizontal price fixing. This problem is the result of “interdependence,” which occurs because “any rational decision [in an oligopoly] must take into account the anticipated reaction of the other firms.” In re Flat Glass Antitrust Litig.,
This “oligopolistic rationality” can cause supracompetitive prices because it discourages price reductions while encouraging price increases. A firm is unlikely to lower its price in an effort to win market share because its competitors will quickly learn of that reduction and match it, causing the first mover’s profits to decline and a subsequent decline in the overall profits of the industry. Flat Glass,
. The Supreme Court has explained that this behavior does not violate antitrust laws. See Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp.,
B
“When faced with whether a plaintiff has offered sufficient proof of an agreement to preclude summary judgment, a court must generally apply the same summary judgment standards that apply in other contexts.” Flat Glass,
However, we have recognized there is “an important distinction” to this general standard in antitrust cases. Flat Glass,
With those principles informing our analysis, this Court has developed specialized evidentiary standards at summary judgment in antitrust cases in general and in oligopoly cases in particular. Our analysis often begins with evidence of parallel price movements. See Chocolate,
Because proof of parallel behavior will rarely itself create an inference of conspiracy, a plaintiff will often need to “show that certain plus factors are present” in order “[t]o move the ball across the goal line.” Chocolate,
While normally all three plus factors are weighed together, in the case of oligopolies the first two factors are deemphasized because they “largely restate the phenomenon of interdependence.” Flat Glass,
After evaluating the evidence through our plus factor analysis,- we then assess whether, “[considering the evidence as a whole,” it is “more likely than not [that the • defendants] conspired to fix prices.” Chocolate,
IV
We now turn to the evidence of record, which we will evaluate in light of the principles just outlined. We first consider the parallel pricing evidence, then move to evidence under the plus factors, and finally consider the record in toto.
1
Valspar .bases its case, primarily on the 31 parallel price increase, announcements issued by the competitors during the alleged conspiracy, arguing that it is “inconceivable” that, on 31 occasions, the competitors “conducted] independent analyses ... [and] nearly simultaneously arrived at identical price increase amounts to be implemented on exactly the same day.” Valspar Br, 37.
Valspar’s argument fails for two reasons. First, its characterization of the suppliers’ price announcements neglects the theory of conscious parallelism and flies in the face of our doctrine that in an oligopoly “any rational decision must take into account the anticipated reaction of the other ... firms.” Baby Food,
Second, Valspar does not engage this Court’s' demanding rule that in order to raise an inference of conspiracy on this point, it was required to show that the suppliers’ parallel pricing went “beyond mere interdependence [and was] So unusual that in the absence of advance agreement, no reasonable firm would have engaged in it.” Baby Food,
Apart from Valspar’s failure to carry its burden, DuPont demonstrates that “market realities -... clearly controvert [Vals-par’s] contention” that these announcements are evidence of a conspiracy. Id. at 131. First, supply contracts in the titanium dioxide industry contained price-protection clauses requiring a notice period to customers before a price increase, meaning that if a supplier failed to match a" competitor’s announcement, it was foregoing the possibility of negotiating a price increase during that period. These industry-wide contractual provisions made the benefit of matching a price increase announcement high and the risk minimal: if a competitor later undercut that price in an effort to take market share, the supplier could refrain from implementing the price increase or even respond by lowering its price. Second, DuPont demonstrated that the market for titanium dioxide remained competitive despite the frequent price increase announcements. Indeed, Valspar employees testified that it was “very common” to negotiate away a supplier’s attempt to increase price, DuPont Br. 6, and said that “[o]ften ... an aggressive supplier would be interested in achieving more volume and would come in and offer a [lower] price,” id. at 9. Across all suppliers’ attempted price increases, Valspar was able to avoid that increase (or even negotiate a decrease) one-third of the time. Thus, Valspar’s characterization of this evidence is controverted by market realities; “aggressive” and “common” price competition between firms is inconsistent with the idea that those same firms have conspired not to compete on price.
2
Valspar also advances the related argument that the flurry of price announcements reflects a drastic change from pre-conspiracy behavior in the titanium dioxide market. A change in industry practices must be “radical” or “abrupt” to “create an inference of a conspiracy.” Chocolate,
We disagree. In Chocolate, the plaintiffs advanced a similar argument, relying on an increased frequency in parallel pricing activity from pre-conspiracy behavior. There, we explained that “the focus of the Piaintiffs’ argument is unduly narrow” because “[historically, parallel pricing in the U.S. chocolate market has not been at all uncommon.” Chocolate,
B
Having found that the pattern of parallel price increases does not raise an inference of conspiracy, we next turn to Valspar’s argument that the plus factors evidence a conspiracy. As explained above, this Court has developed a specialized rule that in oligopolistic markets, “ ‘the first two factors largely restate the phenomenon of interdependence,’ ... [which] leaves traditional non-economic evidence of a conspiracy as the most important plus factor.” Chocolate,
1
The first factor relates to motive to enter a conspiracy, i.e., that “the market is conducive to price fixing.” Id. at 398. There is little doubt that this highly concentrated market for a commodity-like product with no viable substitutes and substantial barriers to entry was conducive to price fixing.
The second plus factor looks for evidence of action against self-interest, ie., “evidence that the market behaved in a noncompetitive manner.” Flat Glass,
Most of Valspar’s other economic expert evidence addresses the first two plus factors as well. See Flat Glass,
2
We finally reach Valspar’s evidence under our third plus factor: traditional conspiracy evidence, where we look for “proof that the defendants got together and exchanged assurances of common action or otherwise adopted a common plan even though no meetings, conversations, or exchanged documents are shown.”
First, Valspar shows that DuPont and the other competitors took part in a data sharing program offered by the Titanium Dioxide Manufacturers Association. As part of this program (the Global Statistics Program, or GSP) the competitors provided production, inventory, and sales-volume data (but never price data) to the TDMA, which then aggregated, anonym-ized, and redistributed the data.
Without citing any precedent to show why this type of information sharing was illegal, Valspar argues that the GSP allowed each conspirator to calculate its own market share and thus deduce whether it was, getting, its fair share of the conspiracy’s profits.. This argument suffers from the loaded question fallacy. Instead of setting out to prove: “Does the GSP show that a conspiracy existed?,” Valspar attempts to answer: “How did the GSP further the conspiracy?” This approach cannot satisfy Valspar’s burden. “[A] litigant may not proceed by first assuming a conspiracy and- then explaining the evidence accordingly.” Blomkest Fertilizer, Inc. v. Potash Corp. of Saskatchewan,
Moreover, our prior decisions undermine Valspar’s argument that the GSP supports an inference of conspiracy For example, in Baby Food, we affirmed summary judgment despite the fact that the alleged conspirators’ sales representatives had “exchanged] pricing information,” explaining that there was no evidence these exchanges had any effect over the companies’ final pricing decisions,
The data exchanged as part of the GSP looks innocuous when compared to the information in Baby Food and Flat Glass. The GSP aggregated and blinded “members’ monthly sales, production, and inventory data worldwide,” but never collected price information. Valspar Br. 47. Valspar argues that “the co-conspirators partially disaggregated the data to track individual firms.” -Valspar Br. 48. But as the District Court noted, “the evidence provided by Valspar does not support this conclusion” and Valspar’s own expert conceded that the GSP merely allowed each firm to calculate its own market share. Valspar,
Belatedly, Valspar claims that the alleged conspirators “used the TDMA meetings to communicate their pricing plans, coordinate price increases, and confirm that each competitor would follow the leader on price increases.” Valspar Br. 50. Valspar’s argument essentially begins and ends with opportunity: the TDMA meetings brought the competitors together, so one should assume that they used the meetings to conspire. But as the District Court noted, “[t]here is no evidence that there was any discussion of prices during these meetings and certainly no evidence of an agreement.” Valspar,
Next, Valspar suggests that the competitors used industry’consultants as conduits to funnel information. For example, Valspar points to an e-mail from a Kronos employee to a consultant noting that the employee had heard rumors of an impending Huntsman price increase, but thought it “sound[ed] weird” and wanted to know if the consultant could “confirm anything from [his] lofty position.” Valspar Br. 20.
This sort of inquiry to a consultant is not probative of conspiracy. We have explained that “it makes common sense to obtain as much information as possible of the pricing policies and marketing strategies of one!s competitors.” Baby Food,
Valspar also- emphasizes a selection of internal e-mails sent by the various competitors. For example, a DuPont e-mail advocated for a price modification “[o]nly if you are not undercutting- a Kronos price increase!” Valspar Br. 9. A Millennium email said: “We should' have. this extra [market] share—customers have been and want to buy this from us. Competitors will let us have this.” Id. at 8. And a Cristal email stated that “all major global players have been very disciplined with pricing implementation up to this point.” Id. at 10.
These e-mails are helpful to Vals-par, but only superficially. They may raise some suspicion insofar as they indicate that something anticompetitive is afoot. But as we have explained, oligopolistic conscious parallelism is by nature anticompet-itive and also legal. See Chocolate,
This logic explains away most of Vals-par’s concerns. For example, DuPont would not want to undercut a Kronos price increase, because doing so would result in Kronos lowering its price and a concomitant decrease in profits for everyone. See Flat Glass,
Finally, Valspar highlights a handful of inter-competitor sales at below market prices, arguing that those sales were used to redistribute gains and losses to maintain the alleged conspiracy. But looking to the specific facts present here, the District Court found that the sales were “just as consistent with non-collusive activity as with conspiracy.” Valspar,
Valspar does not seriously dispute these explanations, but instead argues “[i]f one seller buys anything from another at non-market prices, then a resource transfer is made for which there is no reasonable, noncollusive explanation.” Reply Br. 21 (quoting Wiliam E. Kovacic et -al., Plus Factors and Agreement in Antitrust Law, 110 Mich. L. Rev. 393, 423 (2011)). Valspar offers no case support for this proposition, but instead puts all its eggs in the basket of a single law review article. See id. But that law review article: (a) spends only one paragraph on this theory; (b) cites no precedent or economic studies to support it; (c) recognizes that patent licensing and cross licensing can be legitimate; and (d) seems to limit its analysis to “interfirm transfers of resources that are largely void of productive unilateral motivations.” Kovacic, supra, at 423. In the face of DuPont’s reasonable explanations to the contrary, we decline to give this isolated quotation the force of law.
3
Having considered each piece of evidence individually and decided that none raises an inference of conspiracy, , we must now consider the evidence as a whole.
First, Valspar did riot offer any single form of evidence that would have gotten it close to showing that a conspiracy is more likely than not. Valspar emphasizes the pattern of parallel price announcements, but for the reasons explained, we don’t find them particularly persuasive. See supra Section IV-A-1, 2. By comparison, in Chocolate and Baby Food, where summary judgment was granted in favor of the alleged conspirators, the plaintiffs’ cases were supported with far stronger lead evidence than present here. For example, the Chocolate plaintiffs established that the very same defendants had been part of a contemporaneous price-fixing conspiracy in Canada—to which one of the defendants had already pleaded guilty to the Canadian authorities.
Just as Valspar’s lead evidence is weaker than that in our relevant cases, so too is its supporting evidence. For example, although Valspar alleges that the competitors may have swapped certain price infor-matiori through the TDMA or consultants, there is no evidence that price information was ever voluntarily exchanged, and the information that allegedly was exchanged through these sources pales in comparison to what was shared in cases where we affirmed summary • judgment to defendants. See supra Section IV-B-2. Likewise, the internal e-mails uncovered by Valspar look harmless next to those in our caselaw. First, all of the e-mails uncovered by Vals-par were internal to each competitor, whereas- in Baby Food there was regular communication between competitors.
In sum, after reviewing the record as a whole, we conclude that the District Court did not err when it held that Valspar’s evidence did not meet our standard to survive summary judgment.
o
One final point deserves mention. Vals-par makes much of thfe District of Maryland litigation where summary judgment was denied on a materially similar record. It argues that “principles of comity and the doctrine of stare decisis should have given the Delaware court greater pause before reaching a decision in conflict with the Maryland Action.*’ Valspar Br. 61.
Valspar’s argument has an obvious flaw: the District of Maryland sits within the United States Court of Appeals for the Fourth Circuit. See 28 U.S.C. § 41. Thus, the Maryland District Court, had no obligation to consider Third Circuit precedent, but the District Court in this case was bound by it. This resulted in the Maryland court applying a standard quite different from, the one we have developed and that the District Court applied. Compare Valspar,
* * *
For the reasons stated, we will affirm the judgment of the District Court.
Notes
. As Valspar and our dissenting colleague point out, Matsushita involved an alleged conspiracy that did not make "economic sense,”
While the dissent's interpretation of Mat-sushita is reasonable, it is contrary to Third Circuit jurisprudence. In Chocolate, we held that a plaintiff in an oligopoly case must provide inferences that show that the alleged conspiracy is "more likely than not.”801 F.3d at 412 . And in Flat Glass, we considered and rejected the dissent’s more limited reading of Matsushita by acknowledging that some scholars think our extension of Matsushita is "an unfortunate misinterpretation” of that case while nonetheless continuing our "circumspect approach.”385 F.3d at 359 & n.9 (citation omitted).
. If a plaintiff provides direct evidence, then the "strictures of Matsushita [do] not apply,” Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co.,
. Valspar seems to argue that proof of a tacit agreement among the suppliers—that is, an awareness that they were engaging in conscious parallelism—should suffice to meet this factor. We disagree. While tacit agreements remain illegal under § 1, Bell Atl. Corp. v. Twombly,
. While the dissent wonders what it will "now take for a plaintiff relying on. circumstantial evidence to move the ball across the goal line,” Dissent at 205, the above precedents already resolve that question. Namely, the plaintiff's inferences must show that conspiracy is "more likely than not.” Chocolate,
. Indeed, this same mistake pervades Vals-par’s argument. As the District Court aptly explained, Valspar generally "neglects the theory of interdependence.” Valspar,
. Valspar also notes that the suppliers' executives denied engaging in "follow the leader pricing.” Valspar Br. 15. Essentially, Valspar is arguing that we should infer a conspiracy from this potential pretext. That argument fails under our caselaw because "pretextual reasons are insufficient to create a genuine issue of fact without other evidence pointing to a price-fixing agreement.” Chocolate,
. Thus, the circumstances here are different than those in Flat Glass, where we stated that "[a]n agreement to fix prices is a per se violation of the Sherman Act even if most or for that matter all transactions occurred at lower [than list] prices.”
. Although the first two plus factors may, at times, "do more than restate economic interdependence,” Flat Glass,
. In addition, Valspar would have us give the expert’s conclusion an outsized role in the summary judgment analysis. While we have explained that a district court should not "im-permissibly weigh[ ]” expert evidence by picking out "potential flaws,” Petruzzi's,
. The dissent claims that we ignore this precedent and "required[ ] Valspar to present evidence of direct meetings and conversations,” Dissent at 205. Not so. There is no doubt that a plaintiff can satisfy this plus factor with circumstantial evidence, but that circumstantial evidence must indicate the existence of an ''actual, manifest agreement not to compete.” Flat Glass,
. Additionally, the GSP most resembled a data collection program blessed by the Ninth Circuit in In re Citric Acid Litigation, where a centralized trade association, "collected figures on production’and sales from each of its members, audited this information on an annual basis, and produced statistics aggregated by country on citric acid production and sales."
. Although Valspar and the dissent contend that the competitors implemented their conspiracy through public announcements of their price increases, these e-mails reflect that, even if such "signalling” occurred, it was not in furtherance of any prior agreement. Had the competitors "got[ten] together and exchanged assurances of common action or otherwise adopted a common plan,” Flat Glass,
. The dissent reads these e-mails differently, arguing that they show the competitors (1) often “would not undercut one another’s prices [ (2) ] and that they were involved in an organization (i.e., cartel) controlling prices.” Dissent at 208 (emphasis added) (citation omitted). We agree with the first proposition, but that is a natural consequence of oligopo-listic interdependence. See Flat Glass,
. Our dissenting colleague claims that, in the foregoing section, we went through "each individual piece of evidence and disregarded] it if we could feasibly interpret it as consistent with the absence of an agreement to raise prices.” Dissent at 212 (citation omitted). That misunderstands our mode of analysis. For the sake of Coherence, we presented and discussed each piece of evidence separately, and found that no single piece on its own, made a conspiracy more likely than not. (After all, if á single piece of evidence made conspiracy more likely- than not, Valspar would survive summary judgment and our task would end.) We now consider the evidence together to determine whether the entire body of evidence—viewed in context—tips the scale in Valspar's favor.
. Contrary to Valspar’s contention; our case-law does not foreclose the possibility that a plaintiff can defeat summary judgment with only circumstantial evidence in the Section 1 oligopoly context. That circumstantial evidence, however, must be non-economic evi-' dence of an actual agreement between the conspirators, and not just a restatement of the interdependent economic conduct that we must accept in an oligopolistic marketplace. See Petruzzi’s,
Dissenting Opinion
dissenting.
I respectfully dissent.
The essential question here is whether thirty-one (31) parallel price increase announcements by a small group of suppliers over a ten (10) year period were mere coincidence (lawful and, in fact, expected in the world' of oligopolies) or evidence of an agreement to fix prices (unlawful even among oligopolists). I think there- are enough factual issues in this case that the question whether it was a lawful, coincidence or an unlawful agreement should be decided by a jury.
The majority’s ruling creates an unworkable burden, not supported by our precedent, for plaintiffs seeking to prove a Sherman Act price-fixing case with circumstantial evidence. Second, it affirms a decision where á district judge weighed and compartmentalized evidence, a task better suited for juries—not judges.
An antitrust plaintiff may avoid summary judgment based upon circumstantial evidence alone. That concept is almost a legal axiom, yet it finds no home in the majority opinion. We have long held that a “plaintiff in a section 1 case does not have to submit direct evidence, i.e., the so-called smoking gun, but can rely solely on circumstantial evidence and the reasonable inferences drawn from such evidence.” Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co.,
As a general principle, “antitrust law limits the range of permissible inferences from ambiguous evidence in a § 1 case,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
This Court favors a sliding scale approach to determine the types of inferences allowed to be drawn from circumstantial evidence in antitrust cases. According to our Circuit’s precedent, and that of the Supreme Court’s, the range of inferences that may be drawn from circumstantial evidence depends upon “the plausibility of the plaintiffs’ theory and the dangers associated with such inferences.” Chocolate,
The majority performs a thorough analysis of the evidence of parallel conduct and the “plus factors.” Viewing all this evidence as a whole, I believe it clear that summary judgment was not proper in this case.
A. Parallel Conduct
It is true that conscious parallelism alone cannot create an inference of conspiracy. The majority has taken this to mean that any evidence of conscious parallelism is therefore incapable of raising an inference of conspiracy. This is incorrect. Parallel pricing is a necessary requirement of any § 1 price-fixing claim, and simply because parallel pricing alone cannot preclude summary judgment does not mean that courts ignore evidence of it. Indeed, our precedent has repeatedly warned against overlooking this important factor in these types of cases, especially where the plaintiffs economic theory—as it does here—makes perfect economic sense.
The sheer number of parallel price increase announcements in this case—31 to be exact—is unprecedented. Cf. Flat Glass,
This amount of parallel price increase announcements, in a relatively short time period, commands attention. In Flat Glass, we considered the temporal proximity between the companies’ respective price increase announcements as evidence of an agreement to conspire.
The unprecedented amount of parallel price increase announcements, while not dispositive, would undoubtedly raise red flags to any reasonable fact finder. Vals-par’s theory of liability makes “perfect economic sense.” Chocolate,
Of course, “[f]or parallel pricing to go beyond mere interdependence, it must be so unusual that in the absence of an advance agreement, no reasonable firm would have engaged in it.” Baby Food,
The sheer amount of parallel conduct in this case, coupled with the plausibility of Valspar’s economic theory, should inform our analysis of the plus factors. Flat Glass,
■The majority’s formulation of the summary judgment standard in this case, coupled with its dismissive treatment of unprecedented parallel-conduct evidence, creates too high a hurdle for plaintiffs attempting to prove a price-fixing conspiracy using circumstantial evidence. The limitations in antitrust cases announced in Matsushita, and that we followed in Chocolate, were never meant to require something more than circumstantial evidence of ans agreement to preclude summary judgment. Nor did they impose some “special” burd|en. Eastman Kodak Co. v. Image Tech. Servs., Inc.,
The U.S. Supreme Court has gone so far as to caution against this kind of misapplication of Matsushita. In Eastman Kodak Co. v. Image Technical Services, Inc., it emphasized:
The Court’s requirement in Matsushita that the plaintiffs’ claims make economic sense did not introduce a: special burden on ’ plaintiffs facing summary judgment in antitrust cases. The Court did not hold that if the moving party enunciates any economic theory supporting its behavior, regardless of its accuracy in reflecting the actual market, it is entitled to summary judgment. Matsushita demands only that the nonmoving party’s inferences be reasonable in order to reach the jury, a requirement that was not invented, but merely articulated, in that decision. If the plaintiffs theory is economically senseless, no reasonable jury could And in its favor, and summary judgment should be granted.
B. The Plus Factors
Although the majority recognizes there is no exhaustive list of- plus -factors, Flat Glass,
While we often rely on the “big 3” plus factors (motive, actions contrary to interest, and traditional conspiracy), the plus-factor inquiry is not intended to be rigid or formulaic. Flat Glass,
The majority is correct that evidence of the first two plus factors may not aiways nudge the ball over the goal line for a plaintiff at summary judgment because they “often restate interdependence.” Flat Glass,
1. Motive to Enter Into a Conspiracy
Motive is “important to a court’s analysis, because [its] existence tends to eliminate the possibility of mistaking the workings of a competitive market ... with interdependent, supracompetitive pricing.” Flat Glass,
The majority mentioned only' that evidence of motive often restates interdependence and thus does not create an inference of concerted action. However, in Chocolate, cited often by the majority, we simply recognized that “evidence, of motive without more does not create a reasonable inference of concerted action.”
2. Actions Against Self-Interest
In the District Court, Valspar pointed to substantial evidence that DuPont and the other manufacturers acted contrary to their self-interest. First, Valspar noted that Ti02 prices rose despite no change in the Ti02 market. Second, Valspar argued that the market shares of the Ti02 manufacturers remained relatively stable from 2002 to 2013. Third, Valspar relied on the fact that DuPont and the other manufacturers made intercompany sales to each other at below-market value.
The District Court seemed not to heed Flat Glass's pronouncement that “certain types of ‘actions against self interest’ may do more than restate economic intérdepen-dence.”
In a 2002 email, Paul Bradley at Huntsman noted that it would be possible to “derive” each individual manufacturer’s production of Ti02 from the GSP- data. Valspar also produced evidence suggesting that the manufacturers collectively used industry consultant Jim Fisher as a conduit to share confidential information. Fisher attended an industry conference which the manufacturers—including DuPont—attended. According to Fisher, at this conference the Ti02 manufacturers “discussed the need to take advantage of tight market conditions to improve pricing.”
The same actions contrary to self-interest that led the Seventh Circuit to reverse summary judgment in High Fructose are also present here. Areeda’s treatise recognizes this in identifying the type of oligopoly that may nonetheless be collusive: “there were numerous oral and some written statements by employees of the defendant to the effect that they had an understanding that they would not undercut one another’s prices and that they were involved in an organization (i.e. cartel) controlling prices.” Phillip E. Areeda <& Herbert Hovenkamp, Antitrust Law ¶ 1431b, at 232 (3d ed. 2010) (citing High Fructose,
There is no shortage of these emails, all of which support an inference that the Ti02 manufacturers were working together. pursuant to an agreement to maintain price. There are further emails indicating that all the Ti02 suppliers were “on the bus,” that DuPont was “training” others on price, and that some of the suppliers were planning price increase announcements in order to allow other suppliers to “get on their horses.” In 2006, a DuPont executive went so far as to comment about another’s price increase: “the timing may be no coincidence - their reading of the CEFIC info like ours should give them confidence that NA [North American] price increases can be prosecuted despite the flat market.” This email is particularly probative of an agreement, given the DuPont executive’s recognition that they could continue to hike up prices even though demand was decreasing. See Flat Glass,
The repetitive pattern of public price increase announcements is also a garden variety example of action against self-interest. When there is evidence that “the publication of wholesale price increases was intended to make, and has the effect of ... ensuring competitors could quickly learn of, and respond to” these price increases, an inference of an agreement to fix prices arises. See Petroleum Prods. Antitrust Litig.,
The majority relies heavily on the fact that not all of the co-conspirators’ parallel price increase announcements resulted in a sale at the actual announced price. Drawing a distinction between price increase announcements and actual increases has been criticized by judges and scholars alike. Judge.Posner has emphasized that “[i]n deciding whether there is enough evidence of price fixing to create a jury issue, a court asked to dismiss a price-fixing suit on summary judgment must be careful to avoid three traps.” High Fructose,
One of Judge Posner’s traps is “to distinguish between the existence of a conspiracy and its efficacy.” Id. at 656. In other words, arguing that although there was an agreement to fix prices, the goods were not actually sold at that price. Id, The majority does just that by relying on the fact that, often times, DuPont and the manufacturers sold Ti02 at a lower price than reflected in their initial parallel price increase announcements. As explained by Areeda (who the majority cites frequently and whose opinions permeate Third Circuit antitrust jurisprudence), a “price announcement given in the hope that rivals will follow” evinces an agreement if “repetition creates an expectation of such behavior.” Areeda & Hovenkamp, Antitrust Law ¶ 1422b, at 171 (3d ed. 2010) (emphasis added).
Our own precedent is at odds with such an analysis. See Flat Glass,
The majority fell into this trap. There is plenty of evidence, in the form of emails, that DuPont and the other Ti02 manufacturers made price increase announcements “in the hope that rivals will follow.” Areeda & Hovenkamp, Antitrust Law ¶ 1422b, at 171. While this is not conclusive evidence of an agreement, the scale tips in favor of finding an agreement when there is “repetition” of such price increase announcements. Id. If nothing else, this case involves repetitive price announcements. This repetition clearly gave the suppliers “an expectation,” id., which is further.illuminated by the drastic increase in parallel price increase announcements from 2002 to 2013. These emails, in conjunction with the pattern, frequency, and. effect of the price announcements, tend to exclude the possibility that the Ti02 manufacturers were acting independently.
Valspar also presented evidence that DuPont- and the other suppliers consciously maintained static market shares.-Market share stability is a well-recognized symptom of collusive and concerted action in antitrust cases. See William E. Kovacic et al., Plus Factors and Agreement in Antitrust Law, 110 MICH. L. REV. 393, 415, 422 (2011).
Dovetailing with this evidence of static market shares is evidence that the Ti02 manufacturers made intercompany sales of Ti02, meaning, they sold Ti02 to one another. This evidence might 'indicate pure competition but for-the. fact that .the manufacturers frequently sold the Ti02 to their competitors, at below-market prices. For example, when DuPont would sell Kronos Ti02, Kronos paid an average of 16% less for the Ti02 than DuPont’s own customers did. DuPont also sold Ti02 to Millennium at below-market prices.
The majority downplays this evidence of below-market intercompany sales. It apparently considered these sales just as consistent with non-collusive activity as with conspiracy because: (1) DuPont used some Ti02 in its own production in 2005 and 2006; (2) a DuPont plant in Mississippi shut down for five months; and (3) DuPont’s sales to Kronos were governed by a patent settlement agreement from 2006 to 2008. The District Court, and the majority, found the volume of intercompa-ny sales insufficient to constitute a “true-up.”
The majority notes that the intercompa-ny sales were low in number and unlikely to show an agreement. According to this logic, there is no evidence of a “trué-up” because the intercompany sales were fairly low in quantity. Yet the very purpose of a “true-up” is for the companies within a cartel to -maintain their market share. Therefore,-it might not necessarily make sense for a company to make a large cross-sale, or a large number, of cross-sales, in order to maintain its relative market share.
Obviously, intercompany sales “could” be redistributions of gains or losses, Valspar,
3. Traditional Conspiracy Evidence
Traditional conspiracy evidence is often the most important “plus factor” in a case like this one. Chocolate,
This Court has explicitly and repeatedly held that “traditional conspiracy” evidence may exist “even though no meetings, conversations, or exchanged documents are shown.” Chocolate,
In reality, Valspar presented various forms of traditional conspiracy evidence. For example, Valspar presented a Millennium email stating “we have competition on board for the Oct 1 price increase announcement.”
Today’s decision could easily be read to require direct evidence of an agreement in an oligopoly/antitrust case despite the fact that neither our prior jurisprudence (nor the Supreme Court’s) has ever required such evidence. What’s more, it is not even correct to state that no meetings or conversations between competitors took place. In 2004, the CEO of Millennium met with the President of Huntsman. The very next day, an internal Millennium email stated that they had “competition on board for the Oct 1 price increase announcement.” A few years earlier in 2002, DuPont announced a price increase a few days after Jim Fisher met with Kronos and then with DuPont. And if that wasn’t enough, according to Jim Fisher, the suppliers, at a meeting together, “discussed the need to take advantage of tight market conditions to improve pricing.”
I am not sure how this circumstantial evidence could be stronger. It unequivocally shows that one alleged conspirator’s (Millenium’s) CEO met with another alleged conspirator’s (Huntsman’s) President days before a parallel price increase announcement. This meeting occurred at the same time an email was written stating that Ti02 “competition” was “on board” with a particular price increase announcement. Even more persuasive, there is evidence that all the Ti02 suppliers discussed “improv[ing] pricing” at an industry conference in 2005 and that in 2002 DuPont and Kronos announced an identical price increase just days after Jim Fisher met with these two “competitors.”
A jury should be allowed to determine whether Fisher’s meetings with both Kro-nos and DuPont—days before a parallel price increase announcement—were suspect. A jury should be allowed to determine whether an email that “competition” is “on board” for a price increase announcement was concerted action, particularly when this email was written one day after Huntsman’s President personally met with Millennium’s CEO. A jury should be been permitted to decide whether a meeting with the Ti02 manufacturers, in which they explicitly discussed “improving] pricing,” supports an inference of concerted action. This is the exact sort of powerful evidentiary synergy the majority implies is absent from Valspar’s case.
The inculpatory flavor of these emails is enhanced by the fact that the suppliers were all a part of the TDMA, which gave them access to highly confidential information via the GSP. The majority attempts to analogize the GSP to In re Citric Acid Litigation,
I agree with the majority that membership in a trade association,- in itself, cannot serve as traditional evidence of a conspiracy. Nonetheless, our task is not to view the Ti02 suppliers’ membership in the TDMA in a vacuum. When viewed in conjunction with the other evidence, the membership can be seen in a much different light than Citric Acid. For starters, there is evidence here ■ (absent in Citric Acid, Chocolate, or any other case) of 31 parallel price increase announcements. Nearly all of these announcements- came within thirty days of a TDMA meeting.
(The majority downplays the role of this, key “industry consultant” Jim Fisher. There is evidence suggesting Fisher was used as a vehicle to carry out the suppliers’ collusive agreement. On June 11, 2002, DuPont publicly announced a price increase.
There .is plentiful evidence of price signaling (another plus factor) in this case. In Petroleum Products Antitrust Litigation, the U.S. Court of Appeals for the Ninth Circuit confronted nearly identical circumstantial evidence of price signaling.
, DuPont maintains that it made price announcements publicly because it was required to do so per its contracts with customers. While it is true that DuPont was required to notify its customers when it changed its price, there is no evidence that DuPont was required to do so publicly, In fact, the record evidence suggests the opposite. Notably, DuPont never publicly announced price decreases. This supports an inference that DuPont’s public price increase announcements were for the purpose of collusion rather than customer notification.
The Ti02 manufacturers even admitted they did not use public price increase announcements to notify customers. When asked about the purpose of public announcements, Kronos’s Jay Becker agreed he would “never” rely on a public price increase to provide Kronos customers with notice of a price increase. Gary Cianfíchi, from Millennium, similarly stated that he did not believe any customer contract required public notice.. Larry Rogers, from Kronos, testified he “really, couldn’t say why” price increases were announced publicly given that the customers were notified privately in writing. This evidence also supports an inference that the, manufacturers used public price increase announcements as a concerted method of fixing prices market-wide.
The traditional conspiracy evidence in this case is much different than it was in Chocolate. We recognized in Chocolate that a company’s departure from pre-conspira-cy conduct can serve as traditional conspiracy evidence, which is the “most important plus factor.” Chocolate,
First, and most basic; Chocolate involved comparing 2 pre-conspiracy price increases with 3 post-conspiracy price increases. Id. Here, by stark contrast, we must compare 3 pre-conspiracy increases with 31 post-conspiracy increases. In other words, in Chocolate, the pre-post ratio was just above 1:1 whereas here the ratio is 10:1. It would be difficult to claim that such a change in conduct is not “abrupt” or “radical.” In a case with unprecedented (31) parallel price increase announcements, such a finding creates an unwarranted burden for plaintiffs relying on circumstantial evidence to prove a price-fixing conspiracy. The majority attempts to explain this radical and abrupt shift, implying it was “just an uptick in frequency.”
Second, the nature of the communications between competitors in Chocolate is different from the communications here. In Chocolate, we found the communications unpersuasive in part because “unlike in Flat Glass,” the communications did “not reveal pricing plans dependent on others following.” Id. at 408. Here there is evidence, as in Flat Glass, that could give rise to an inference that the Ti02 manufacturers’ pricing, decisions were dependent upon the decisions of others. Like Flat Glass and unlike Chocolate, the communications here were made between high-level rather than low-level employees. The evidence that Fisher communicated contemporaneously with people from Kronos, Millennium, Huntsman, and DuPont suggests the individual suppliers’ pricing plans were “dependent on others following.” Id. The DuPont email advising to modify pricing “[o]nly if it meant a Kronos price increase would not be “undercut” similarly suggests pricing plans “dependent on others following.”' Id. (emphasis added). As does Fisher’s direct testimony that, at an industry meeting, the Ti02 suppliers “discussed the need to take advantage of tight market conditions to improve pricing.”
Third, the pre-conspiracy prices in Chocolate related to “different products” than the post-conspiracy price increases.
One final point has been overlooked in comparing this case to Flat Glass and Chocolate: neither Flat Glass nor Chocolate involved nearly as many parallel price increase announcements as we have here. To be clear, again, these parallel price increase announcements, viewed alone, are not enough to defeat summary judgment. However, we are not to “consider each individual piece of evidence and disregard it if we could feasibly interpret it as consistent with the absence of an agreement to raise prices.” Flat Glass,
These principles are especially important given that the majority continually relies on the proposition that “[cjonduct as consistent with permissible competition as with illegal conspiracy does not, standing alone, support an inference of conspiracy sufficient to survive summary judgment.” Matsushita,
It would not be too difficult to view the 31 parallel price increase announcements, standing alone, as consistent with interdependence. This, of course, would ignore the comparatively miniscule amount of pre-conspiracy price increase announcements: 3. It would also not be too difficult to view the relative market share stability of the Ti02 suppliers, standing alone, as consistent with interdependence. This, of course, would ignore the simultaneous intercompa-ny sales at below-market value. The same goes for the manufacturers’ TDMA and CEFIC membership, meetings, and the GSP. There is nothing inherently collusive about trade associations, industry meetings, or aggregated statistics. This too, of coprse, would ignore the role Jim Fisher played as a communicator of confidential information between the Ti02 suppliers and that the co-conspirators’ executives had meetings together days and hours before they announced parallel price increases.
The majority seems to discount the plausibility of Valspar’s economic theory. This factor has been a focal point in our antitrust jurisprudence for decades. Matsushita,
There is no disagreement here that courts should take a “cautious” approach to accepting inferences from circumstantial evidence in price-fixing cases involving oligopolies. See Chocolate,
In Chocolate, this Court confirmed that “[ujnder Matsushita, the range of acceptable inferences that may be drawn from ambiguous or circumstantial evidence varies with the plausibility of the plaintiffs’ theory.”
C. Conclusion
I am, certainly mindful of the theory of interdependence and the presence of an oligopoly. With that said, from the very start, Valspar presented a theory that makes perfect economic sense. It supported this theory with strong evidence of parallel conduct in the form of 31 (an unprecedented amount) of parallel price increase announcements. Recognizing conscious parallelism to be insufficient on its own to survive summary judgment, Vals-par also presented viable evidence in support of the plus factors: (i) price.signaling, (ii) exchanges of confidential information, (iii) relatively static market shares, (iv) intercompany sales of Ti02 at below market price, (v) abrupt, departure from pre-conspiracy conduct, and (vi) a market susceptible to conspiracy. Although the Ti02 market is an oligopoly, Valspar also presented evidence that did not simply restate interdependence: non-price acts against self-interest. -Finally, it presented traditional conspiracy evidence. Viewed together, and not compartmentalized, all this evidence was more than sufficient to preclude summary judgment. : .
For these reasons, I respectfully dissent.
. Based on this sliding scale approach—first articulated in Matsushita—courts have taken varying approaches to cases depending on the strength of the plaintiffs theory. Compare Matsushita,
. We discuss the plausibility of Valspar’s economic theory in greater detail infra. For now, it is enough to say we have previously held that Valspar's exact economic theory (parallel price fixing among oligopolists) makes perfect economic sense: "an agreement among oligo-polists to fix prices at a supracompetitive level ... makes perfect economic sense.” Flat Glass,
. • I share the concern, of the amicus—namely, that it would be an absurd result if, "in situations 'in which the danger of [parallel pricing] is most serious,” liability would actually’ be "less likely,” Amicus Br. at 15 (quoting Louis Kaplow, Competition Policy & Price Fixing 126 (2015)). A plain reading of our case law reveals this Court never intended to ramp up a price-fixing plaintiff’s burden of proof, especially when the plaintiff's economic theory makes perfect economic sense. Chocolate,
. The majority simply states, without consideration of the actual evidence, that "Valspar has not shown” that the first two plus factors "do more than restate the theory of interdependence.” Majority at 197 n.9. The actual evidence, discussed supra and infra, shows otherwise.
. In re Titanium Dioxide Antitrust Litig.,
. Citing to one single DuPont email, the majority reasons that "[h]ad the competitors gotjten] together and exchanged assurances of common action or otherwise adopted a common plan, ... there would have been no need for DuPont to resort to public announcements to 'test' whether its competitors were 'receiving/understanding [its] price increase messages." Majority at 201 n.14. While it may be possible to reach this conclusion by reading one email in isolation, the evidence as a whole creates a reasonable inference that there was more likely than not an agreement to fix prices. For example, evidence of the meetings between Fisher and all the alleged conspirators, as well as the actual meetings of top executives from Kronos and Huntsman (followed almost immediately by a parallel price increase announcement), as well as the conspirators all discussing "improving pricing” does create an inference of "a common plan.”
. The majority criticizes Valspar’s reliance .on legal scholarship as opposed to case law. This is interesting given that (1) this Court has long., turned to legal scholarship to inform their decisions in antitrust cases involving oligopolists, and (2) the majority itself cites to legal scholarship—including multiple law review articles—seven times.
.' For example, say Company A has a 30%, market share in a particular industry and Company B has a 40% market share in that industry. Obviously, Company A and B, assuming they are competitive, would want to acquire as much market-share for themselves as possible. Therefore, it would defy all logic and notions of procompetitive behavior for Company A (who has a lower market share) to take affirmative actions to stay at 30% rather than grow beyond a 30% market share.
. Titanium Dioxide,
. A "true-up” occurs when companies in a conspiracy redistribute their individual gains and losses in order to comply with their conspiratorial agreement, Kovacic et al., Plus Factors, at 423. Such a transaction "leads to a strong inference of collusion” since there is "no reasonable noncollusive explanation” for intercompany sales at "nonmarket prices” between companies that are supposed to be competing with one another. Id.
. To use another example, say Company A enjoys 35% of the market share, while Company B has 50% of the market share. Assume A and B are colluding and, thus, they want to raise prices and maintain market shares per their agreement. Then assume that Company A’s share drops to 33%. Company B may sell a very small amount o'f product to Company A simply to allow Company A to maintain its market share. Mistaking this as an insignificant sale, merely because of its size or-lack of frequency, would be an oversight.
. Federal Rule of Civil Procedure 56 states: "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the mov-ant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Simply because courts must exercise caution in these types of cases does not .do away with Rule 56’s proposition that genuine disputes of material fact preclude summary judgment: "Generally, the movant’s burden on a summary judgment motion in an antitrust case ‘is no different than in any other case.’ ” Intervest,
. Titanium Dioxide,
. The District Court read this to mean the "collective needs" of Millennium alone. However, read in the context of the entire email, a reasonable jury could certainly conclude the opposite: that the author was referring to the collective ■ needs of the Ti02 industry members.
. In re Titanium Dioxide,
. The majority does not discuss this particularly damning evidence, but states generally that "the record does not show the existence of an actual agreement.” Majority at 198 n.l 1. Contrary to the majority’s insistence, an actual agreement can be shown in the exact way that Valspar has set out to do so in this case. See Areeda & Hovenkamp, Antitrust Law ¶ 1422b, at 171 (3d ed. 2010) ("Although ... mere proof of interdependent pricing, standing alone, may not serve as proof of an antitrust violation, we believe that the evidence concerning the purpose and effect of price announcements, when considered together with the evidence concerning the parallel pattern of price restorations, is sufficient to support a reasonable and permissible inference of an agreement, whether express or tacit, to raise or stabilize prices.”) (emphasis added).
. DuPont's insistence that it did not begin attending TDMA meetings until 2010 is moot given that it attended CEFIC meetings—long before 2010—that were, concurrent with the TDMA meetings. Valspar,
. Titanium Dioxide,
.Obviously, based on this evidence, and other evidence of Fisher’s cross-company communications, a reasonable jury could infer that no direct conversations between the Ti02 manufacturers were needed if Fisher acted as their mouthpiece. ■
, In re Titanium Dioxide,
. DuPont relied on the requirement that, to survive summary judgment, Valspar must present evidence that "tends to exclude the possibility” that the alleged conspirators acted independently. Matsushita,
. In an attempt to assuage concerns about its analysis, the majority tries to justify its heightened standard through Chocolate. According to the majority, this Circuit’s precedent has long required a plaintiff in this type of case to prove that it is “more likely than not” true that there was a price-fixing conspiracy in order to survive summary judgment. Majority at 192 n.1, 194, 194 n.4, 201-02, 201 n.14. The majority makes too much of this dicta. This was not, as the majority claims, some profound announcement of a new legal standard or rule. Indeed, this purportedly axiomatic language has never once been used in any other price-fixing case involving oligopolies. See generally Matsushita,