In Re Tableware Antitrust Litigation

485 F. Supp. 2d 1121, 2007 U.S. Dist. LEXIS 54705, 2007 WL 1202928
Procedural entryThis page is a short order in In Re Tableware Antitrust Litigation. Read the opinion of the Court — 484 F. Supp. 2d 1078
District Court, N.D. California·Decided April 24, 2007·No. C-04-3514 VRW·Published

Opinion

ORDER

WALKER, Chief Judge.

Plaintiffs in these consolidated cases allege that May Department Stores Co and Federated Department Stores, Inc, which operate department stores across the United States, and Lenox, Inc and Waterford Wedgwood, USA, both of which produce fine tableware sold in the United States, conspired with one another to boycott Bed, Bath and Beyond, a competitor of May and Federated. Plaintiffs claim to have purchased fine tableware from May and Federated during the period of the alleged boycott and were thus injured because the boycott impaired competition in that product market. Plaintiffs bring suit under § 1 of the Sherman Act, alleging that defendants’ conduct is condemned per se.

*1123 On March 13, 2007, the court granted summary judgment to Waterford but denied summary judgment to Federated and May. Doc #287. In response, Federated and May (collectively “Federated”) moved for administrative relief to file a second motion for summary judgment. Doc # 290. The court heard oral argument on this motion on April 12, 2007. Doc # 307.

Civ L R 7 — 9(b)(1) requires that reconsideration of any motion be accompanied by a specific showing of a “material difference in fact or law * * * from that which was presented to the Court” before entry of the order at issue and that, “in the exercise of reasonable diligence, the party applying for reconsideration did not know such fact or law at the time” of the order. Civ L R 7-9(b)(l). Federated asserts that it “could not have anticipated the basis” of its current motion because plaintiffs never argued that their claim against the retailers would survive “even if plaintiffs could not link Lenox or Waterford to any claimed conspiracy.” Doc # 290 at 2. The court disagrees. To the extent that these issues were not raised in Federated’s first motion for summary judgment, plaintiffs are not to blame. Federated and Waterford moved for summary judgment in separate motions asserting distinct grounds; the fact that one party succeeded and the other failed is not unforeseeable. Accordingly, Federated’s motion runs afoul of Civ L R 7-9(b). Acknowledging that it is better to recognize an error later than not at all, the court nevertheless proceeds to address the merits of Federated’s motion.

Federated’s motion relies on the following inference: by granting summary judgment for Waterford, the court necessarily concluded that the manufacturers did not agree with Federated and May to cancel the Bed, Bath & Beyond rollout. Doc #290 at 1:19-20. Without an agreement, Federated reasons, the manufacturers acted unilaterally and no antitrust injury exists between plaintiffs and the retailers. Id. at 5:10-16.

To support this rigid dichotomy between conspiratorial and unilateral conduct, Federated relies on Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984), in which the Court observed that “[t]he Sherman Act contains a basic distinction between concerted and independent action.” Id. at 767, 104 S.Ct. 2731 (citing Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984)). But see id. at 768, 104 S.Ct. 1464 (noting that § 1 “does not reach conduct that is hvholly unilateral,’ ” suggesting the distinction is not so sharp) (emphasis added). Yet this passage from Copperweld does not support the dichotomy Federated urges. As a threshold matter, the cited language addresses a wholly inapposite situation: it refers to the Sherman Act’s distinction between § 1 and § 2 of the Act. In Cop-perweld, the Court declined to follow the “intra-enterprise” conspiracy doctrine. That theory of antitrust liability applied between a parent and subsidiary “when there is enough separation between the two entities to make treating them as two independent actors sensible.” 467 U.S. at 759, 104 S.Ct. 2731. The Court emphasized the difference between § 1 and § 2 in rejecting intra-enterprise liability because the parent-subsidiary relationship made any such agreement unilateral. Id. at 767-769,104 S.Ct. 2731 (“The conduct of a single firm is governed by § 2 alone and is unlawful only when it threatens actual monopolization. It is not enough that a single firm appears to ‘restrain trade’ unreasonably.”). Copperweld’s sweeping distinction between § 1 or § 2 does not shed light on the present litigation, in which the allegations indisputably concern multiple firms.

*1124 Moreover, Federated’s position misconstrues plaintiffs’ legal theory, which, as Federated insisted in earlier briefing, relies on a horizontal agreement between the retailers. See Doc # 185 at 2 (emphasizing that plaintiffs “abandoned” their vertical claims). Hence, granting summary judgment for Waterford did not require the absence of any agreement, only insufficient evidence to establish an agreement to take part in the horizontal conspiracy between the retailers. In its order, the court noted that the manufacturers appeared to cancel the Bed, Bath & Beyond rollout at the behest of the retailers, but nonetheless granted summary judgment for Waterford because there was insufficient evidence that the manufacturers conspired to join the retailers’ boycott.

In this regard, ES Development, Inc. v. RWM Enterprises, Inc., 939 F.2d 547 (8th Cir.1991), is instructive. The plaintiff in ES Development purchased land to build an auto mall at which many dealerships would operate. Existing dealers in the area formed a “dealer alliance” in order to oppose plaintiffs auto mall. To do so, the alliance created a form letter complaining about the proposed auto mall, which each member sent to its respective car manufacturer. Plaintiff sought to enjoin these efforts. The Eighth Circuit rejected the dealers’ contention that they merely exercised their legal rights independently. Id. at 554. “The evidence * * * compels the inference that the dealers chose to exercise their individual legal rights in a concerted manner designed to impair plaintiffs ability to procure franchise commitments from various manufacturers.” Id. at 554-555 (emphasis added). The court continued:

The present case provides a further example of the antitrust maxim that “even an otherwise lawful device may be used as a weapon in restraint of trade.” * * *
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In sum, the antitrust laws do not countenance such a concerted individual exercise of the otherwise legal rights of the members of a conspiracy to achieve a combined effect in restraint of trade in excess of that possible were the conspirators to act alone.

Id. at 555-556. Hence, otherwise “lawful” activity is not shielded from the antitrust laws when the activity is “part and parcel” of an effort to restrain trade.

The

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In Re Tableware Antitrust Litigation, 485 F. Supp. 2d 1121, 2007 U.S. Dist. LEXIS 54705, 2007 WL 1202928 (N.D. Cal. 2007).

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Related

Monsanto Co. v. Spray-Rite Service Corp.
465 U.S. 752 (Supreme Court, 1984)
Copperweld Corp. v. Independence Tube Corp.
467 U.S. 752 (Supreme Court, 1984)
ES Development, Inc. v. RWM Enterprises, Inc.
939 F.2d 547 (Eighth Circuit, 1991)
Monsanto Co. v. Spray-Rite Service Corp.
465 U.S. 752 (Supreme Court, 1984)