Opposition Brief — Grinnell Corp. v. Road Sprinkler Fitters Local Union No. 669

Supreme Court, U.S.

FILED

No. 97-2040 AUS 3 1998

}

: i

| CLERK |

IN THE |

Supreme Court of the United States

OCTOBER TERM, 1997

GRINNELL CORPORATION,

Petitioner,

v.

ROAD SPRINKLER FITTERS LocAL UNION No. 669:

UNITED ASSOCIATION OF JOURNEYMEN AND APPREN-

TICES OF THE PLUMBING AND PIPE FITTING INDUSTRY

OF THE UNITED STATES AND CANADA, A.F.L.-C.I.O..,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

BRIEF IN OPPOSITION

WILLIAM W. OSBORNE, JR.

(Counsel of Record

for Local 669)

One Thomas Circle, N.W.

Washington, D.C. 20005

(202) 955-3800

SALLY M. TEDROW

(Counsel of Record

for United Association)

4748 Wisconsin Avenue, N.W.

Washington, D.C. 20016

(202) 362-0041

LAURENCE GOLD

1000 Connecticut Ave., N.W.

Washington, D.C. 20036

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON, D.C. 20001

® > «

TABLE OF CONTENTS

STATEMENT OF THE CASE

ARGUMENT

ii

TABLE OF AUTHORITIES

CASES Page

Adickes v. S.H. Kress Co., 398 U.S. 144 (1970)... 8

Alvord-Polk, Inc. v. F. Schumacher & Co., 37 F.3d |

996 (8rd Cir. 1994), cert. denied, US. —,

SE a Sn aickecsiccteiceneacerndnncetcns 12

Associated Milk Dealers, Inc. v. Milk Drivers

Union, 422 F.2d 546 (7th Cir. 1970) —................ 17

Auer v. Robbins, 519 U.S. 452, 117 S. Ct. 905

E. : } GMRESS ent Ah Utica leer ante Neen Beer inl eka 9

Brown v. Pro Football, Inc., 518 U.S. 231 (1996) .. 14, 15,

16

Corner Pocket of Sioux Falls v. Video Lottery, 123

F.3d 1107 (8th Cir. 1997), cert. denied, sub nom.

Corner Pocket of Sioux Falls v. Powerhouse

Technologies, —— U.S. ——, 118 8S. Ct. 1054

CIID aiceceniidisnseccias antes cidiemeasiainiamaiaiabsomanpeakases 12

Eastman Kodak Co. v. Image Tech. Servs., Inc.,

ee Se Sk BE ite cn oe 11

Embry Riddle Aeronautical Univ. v. Ross Aviation,

Inc., 504 F.2d 896 (5th Cir. 1974) ..........00000000.... 17

General Talking Pictures Corp. v. Western Elec-

Gric Ca., SO6 UA: S06 CRD occ. 13

Illinois v. Gates, 462 U.S. 213 (1983) —..........-2000.... 9

In Re Coordinated Pretrial Proceedings, 906 F.2d

Se CE CI. FID ct rtccdconcettteedceenecinns: 12,13

James R. Synder Co. v. Associated Gen. Contrac-

tors of Am., 677 F.2d 1111 (6th Cir. 1982)........ 17

Larry V. Muko, Inc. v. Southwestern Pa. Bldg. &

Constr. Trades Council, 670 F.2d 421 (3d Cir.

Fs RISO RT Nig Aen ee LSM aI RST SAS EE 17

Larry V. Muko, Inc. v. Southwestern Pa. Bldg. &

Constr. Trades Council, 609 F.2d 1868 (3d Cir.

| SRNR e emer Pn Mere Lt T ae aS Sy ae 17

Lewis v. Pennington, 400 F.2d 806 (6th Cir.),

cert. denied, 398 U.S. 960 (1968) ............00. 17

Local Union 257, Int’l Bhd. of Elec. Workers v.

Sebastian Elec., 121 F.8d 1180 (8th Cir. 1997).. 15

Mackey v. National Football League, 543 F.2d 606

CR SA BED inniiccttncticacinscuticdindiataaanscoks 14

iii

TABLE OF AUTHORITIES—Continued

Page

Matsushita Elec. Industrial Co. v. Zenith Radio,

Ae cee passim

Monsanto Co. v. Spray-Rite Service Corp., 465 U.S.

ra a cubeenduaaeid 5

Phoenix Elec. Co. v. National Elec. Contractors

Ass’n, 81 F.3d 858 (9th Cir. 1996) 2.000.000. 15

Rudolph v. U.S., 370 U.S. 269 (1962) ..........00000..00.. 13

Serfecz v. Jewel Food Stores, 67 F.3d 591 (7th

Cir. 1995), cert. denied, —— U.S. ——, 116

I ead 11

Smitty Bawer Coal Co. v. United Mine Workers,

Gee wae ese Coen Cor. 1980) ................................. 16

Thompson Everett, Inc. v. National Cable Advent

LF, 67 F.3d 1817 (4th Cir. 1996) .................... pe 2 eee

United Mine Workers v. Pennington, 381 U.S. 657

RSI IE AR Ae nye a tO nN RCTS eats 14, 15, 16

United States v. Diebold, Inc., 369 U.S. 654

HERETICS ISR aR te Oe RR ne ames ae 5

MISCELLANEOUS:

RE Re ROD, siscicnssinsrehndccorenssninghintsotenaiis 3,5

BRIEF IN OPPOSITION

The opinions below, the basis of this Court’s jurisdic-

tion, and the statutory provisions involved are set out at

page 1 of the petition for a writ of certiorari.

STATEMENT OF THE CASE

The Fourth Circuit—Circuit Judges Luttig and Motz

and District Judge James P. Jones, by designation—in its

per curiam decision (unpublished), affirming the District

Court’s summary judgment decision in all respects, suc-

cinctly states the basis of Grinnell Corporation’s antitrust

claims, the District Court’s ruling on those claims and

the Court of Appeals’ ruling on Grinnell’s appeal. We

therefore adopt the essentials of that decision as our

statement. -

The Court of Appeals first set out the identity of the

parties, the procedural setting of the case and the grava-

men of Grinnell’s antitrust claims:

Grinnell Corporation, a designer, manufacturer, and

installer of fire sprinkler systems, has for years en-

gaged in a fiercely-contested labor dispute with the

Road Sprinkler Fitters Local Union No. 669 and

the United Association of Journeymen and Appren-

tices of the Plumbing and Pipefitting Industry of the

United States and Canada. While that case was

pending before the National Labor Relations Board

(NLRB), Grinnell brought this action against the

local and national union alleging, in a seven count

complaint, various antitrust, labor law, and state tort

claims.

After two years of extensive discovery, the parties

filed dispositive summary judgment motions.

[T]he district court . . . granted the defendants’ mo-

tions for summary judgment on the antitrust and

labor law claims and dismissed the state law claims.

2

Grinnell’s principal contention, alleged in Count I

of its complaint, is that defendants conspired with the

National Fire Sprinkler Association (NFSA), a trade

association to which Grinnell belongs and to which

prior to September, 1993, it had assigned its collec-

tive bargaining rights, to engage in activity amount-

ing to an illegal restraint of trade under Section 1 of

the Sherman Act. See 15 U.S.C.A. § 1 (West 1997).

Grinnell asserts that defendants and NFSA con-

spired to withdraw the availability of a job program

known as targeting from Grinnell in order to force

Grinnell to reassign its bargaining rights to NFSA.

Under this program, a contractor and the local union

would negotiate concessionary rate agreements as to

an individual project in a particular geographical

area so the contractor might be able to compete

with lower-cost, nonunion contractors. Grinnell also

claims that, in an effort to standardize contract

terms and employment conditions within the sprinkler

industry, the defendants and NFSA conspired, during

the course of negotiating their collective bargaining

agreement, to prevent Grinnell from obtaining more

favorable collective bargaining terms. [Pet. App.

2a-4a. |

The Court of Appeals went on to note that, in granting

summary judgment on these claims.

Judge Harvey explained that “[t]he record discloses

as a matter of law first that defendant Local 669

acted unilaterally in withdrawing from Grinnell the

right to participate in the job targeting program and

second that the Union and the NFSA did not illegally

conspire during their collective bargaining to prevent

Grinnell from obtaining more favorable bargaining

terms.” Moreover, the judge further concluded,

“assum[ing] arguendo, that there is a dispute of ma-

terial fact as to the existence of a conspiracy between

the NFSA and the Union,” the non-statutory labor

exemption from antitrust liability shielded the alleged

restraint. [Pet. App. 4a-5Sa.]

3

The Court of Appeals then concluded as follows:

On appeal, Grinnell repeats the arguments made

below, asserting that the district court ignored evi-

dence supporting its claims. After a painstaking re-

view of the record, as well as consideration of the

briefs, relevant statutes, case law, and the oral argu-

ments of the parties, we conclude that Judge Har-

vey’s assessment of the evidence was accurate and

his rulings correct. Accordingly, we affirm on the

basis of the careful reasoning of the district court.

[Pet. App. S5a-6a.]

ARGUMENT

I,

The first question petitioner Grinnell Corporation

raises—“Whether the court of appeals erred in imposing

a heightened proof standard for antitrust conspiracy

claims at the summary judgment stage that is in direct

conflict with the standards adopted by other circuits,”

Pet. i—is not, in fact, presented by this case.

The District Court’s summary judgment findings rest

on classic, general Rule 56 Fed.R.Civ.Pro. summary

judgment principles and not on any “heightened proof

standard for anitrust conspiracy claims.”

Moreover, Grinnell—in appealing to the Fourth Cir-

cuit from the District Court’s grant of summary judgment

on Grinnell’s antitrust conspiracy claims—did not make

any “erroneous proof standard” challenge to the District

Court’s ruling, much less the “erroneous heightened proof

standard for antitrust claims” contention raised in the

certiorari petition as Question 1.

And, in any event, the Fourth Circuit’s developed

“proof standard[s] for antitrust conspiracy claims” belie

Grinnell’s contention that the Court of Appeals imposes

any such “erroneous heightened proof standard.”

On each of these grounds—which we now develop—

Grinnell’s request for review by this Court falls far short

and should be denied.

4

(a) It is Grinnell’s principal submission, in support of

its certiorari petition, that the Fourth Circuit erred by

“interpreting” the second, antitrust-law-specific portion of

the summary judgment discussion in Matsushita Elec. In-

dustrial Co. v. Zenith Radio, 475 U.S. 574 (1986)

to mandate dismissal of antitrust conspiracy claims

whenever the plaintiff's evidence at the summary

judgment stage is consistent with inferences of both

conspiracy and innocent conduct. Under this inter-

pretation, Matsushita’s rigorous standard applies re-

gardless of the plausibility of the plaintiff's theory

or the nature of the alleged misconduct. [Pet. 12].

1In Matsushita, this Court—in discussing the propriety of the

entry of summary judgment in that §1, Sherman Act antitrust

conspiracy case—first noted the following basic Rule 56 vrinciples:

To survive petitioners’ motion for summary judgment, re-

spondents must establish that there is a genuine issue of

material fact as to whether petitioners entered into an illegal

conspiracy that caused respondents to suffer a cognizable in-

jury. Fed. Rule Civ. Proc. 56(e); First National Bank of Ari-

zona v. Cities Service Co., 391 U.S. 253, 288-289 (1968) ...

[T]he issue of fact must be “genuine.” Fed. Rules Civ. Proc.

56(c), (e). When the moving party has carried its burden un-

der Rule 56(c), its opponent must do more than simply show

that there is some metaphysical doubt as to the material facts.

See DeLuca v. Atlantic Refining Co., 176 F.2d 421, 423 (CA2

1949) (L. Hand, J.), cert. denied, 338 U.S. 943 (1950) ...In

the language of the Rule, the nonmoving party must come

forward with “specific facts showing that there is a genuine

issue for trial.” Fed. Rule Civ. Proc. 56(e) (emphasis added)

Where the record taken as a whole could not lead a

rational trier of fact to find for the nonmoving party, there is

no “genuine issue for trial.” Cities Service, supra, at 289.

[475 U.S. at 585-587. ]

Then, with specific reference to the antitrust laws, the Matsushita

Court added the following with regard to situations in which a :

plaintiff, in opposing a defendant’s motion for summary judgment,

relies on “ambigous evidence” from which, says the plaintiff, “per-

missible inferences” of an “illegal conspiracy” can be drawn:

Respondents correctly note that “f[on] summary judgment the

inferences to be drawn from the underlying facts . . . must be

Daiannin ID riG nee anmerta reece mre aarti rose eoeacumaras

5

That submission avails Grinnell nothing for the most

straightforward of reasons—this case was decided on the

well-settled general summary judgment principles dis-

cussed in Matsushita, and in a manner that pretermitted

any need to apply the Matsushita antitrust law standard

for evaluating “ambiguous evidence” regarding an “il-

legal conspiracy.” Grinnell’s effort to dress up this garden-

variety undisputed fact case as one turning on some sophis-

ticated and disputed antitrust law standard of proof is

made out of whole cloth.

The District Court’s careful opinion—thoroughly an-

alyzing the “massive record” generated by the “volum-

inous discovery” undertaken below, Pet. 20a—makes it

plain that the District Court proceeded by applying the

generally applicable requirements of Rule 56(c), and

without the need to reach any special antitrust law stand-

ard of proof.

On the parties’ cross motions for summary judgment,

the District Court properly allocated to the defendant

Unions as moving parties “the burden of showing the

absence of any genuine issue of material fact” and the

burden of demonstrating the “absence of evidence to

support the nonmoving party’s case” in order to prevail.

Pet. App. 16a, citations omitted, emphasis added. And,

viewed in the light most favorable to the party opposing the

motion.” United States v. Diebold, Inc., 369 U.S. 654, 655

(1962). But antitrust law limits the range of permissible

inferences from ambiguous evidence in a §1 case. Thus, in

Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752 (1984),

we held that conduct as consistent with permissible competition

as with illegal conspiracy does not, standing alone, support an

inference of antitrust conspiracy. Jd., at 764. See also Cities

Service, supra, at 280. To survive a motion for summary judg-

ment or for a directed verdict, a plaintiff seeking damages for

a violation of § 1 must present evidence “that tends to exclude

the possibility” that the alleged conspirators acted independ-

ently. 465 U.S. at 764. [475 U.S. at 587-588.)

6

the District Court, viewing the record “in the light most

favorable to [Grinnell] the party opposing the motion,”

Pet. App. 17a, concluded that Grinnell had failed to make

even “the necessary minimal showing . . . that the de-

fendant may be liable.” Pet. App. 17a, emphasis added.

As for Grinnell’s “job targeting conspiracy” claim,

the District Court first recognized the undisputed discre-

tionary nature of the Union targeting program, which

Grinnell had expressly conceded:

The Union had always reserved to itself the right in

its discretion to permit targeting by a particular con-

tractor or to deny targeting to a particular class of

contractors. There had never been an agreement be-

tween the NFSA and the Union which prohibited the

Union from restricting the application of targeting to

particular contractors. [Pet. App. 26a and n.8.]

With respect to the exclusion of Grinnell from the

Union targeting program in November of 1993, the Dis-

trict Court found that the undisputed evidence established

that

[w]ith bargaining for a new contract about to com-

mence, the Union unilaterally decided to extend the

targeting program only to those employers who

signed an Assent and Interim Agreement or who

agreed to be represented by the NFSA for future

bargaining. [Pet. App. 25a, emphasis added.]

In so doing the District Court relied upon the substantial

affirmative and unrefuted record evidence submitted in

support of the Unions’ motion for summary judgment:

According to the testimony of all Local 669 wit-

nesses and all NFSA witnesses, the NFSA did not

participate in any way in the decision to reimpose

in November the conditions which had to be met by

contractors if they were to participate in targeting.

[Pet. App. 26a. ]

7

Equally to the point the District Court found as fol-

lows with regard to Grinnell’s “proof”:

Grinnell seeks to derive inferences from various facts

of record in support of its contention that proof of

an illegal conspiracy exists in this case. But these

inferences are so tenuous as to amount to no more

than speculation and conjecture. . .. They do not

“fall within the range of reasonable probability” so

as to create a jury issue as to plaintiffs claim that

the Union conspired with the NFSA to withdraw

targeting from Grinnell. [Pet. App. 26a-27a, cita-

tions omitted, emphasis added. ]

As for Grinnell’s alternative “conspiracy theory,” alleg-

ing preclusion of independent collective bargaining, the

District Court again concluded that the record evidence—

including the parties’ bargaining notes and the transcript

and exhibits from a 22 day N.L.R.B. unfair labor prac-

tice hearing growing out of the same events—provided

no support for “[Grinnell’s] conten[tion] that Local 669

and the NFSA agreed that Grinnell would not receive a

more favorable agreement than the one negotiated be-

tween these parties.” Pet. App. 29a. After searching

that record the District Court concluded:

But evidence does not exist that any such agreement

was ever reached. Although the NFSA pressed hard

for inclusion of a most favored nation clause in the

agreement, the demand was eventually dropped and

was not included as a part of the final collective

bargaining agreement reached between the Union

and the NFSA. Moreover, during negotiations with

Grinnell, the Union did not even insist that the terms

and conditions of the Grinnell agreement be the same

as those contained in the NFSA agreement.

The Union at ali times remained flexible in its

bargaining sessions with Grinnell, and indeed, some

of the wage concessions made were more favorable

to Grinnell than those contained in the agreement

8

reached with the NFSA. [Pet. App. 29a, emphasis

added. ]

Grinnell’s inability to controvert the Unions’ factual

assertions for summary judgment purposes left the Dis-

trict Court with no alternative other than to dismiss the

allegation:

[E]vidence does not exist that the Union conspired

during its bargaining with the NFSA to prevent

Grinnell from obtaining more favorable terms than

those contained in the collective bargaining agree-

ment reached between the Union and the NFSA.

[Pet. App. 27a-28a, emphasis added. ]

(b) It is equally fatal to Grinnell’s certiorari petition

that Grinnell made no claim to the Fourth Circuit that

the grant of summary judgment to the Unions and against

Grinnell’s antitrust conspiracy claim was in error and

should be reversed because that summary judgment rested

in whole or in part on an “erroneous heightened proof

standard for antitrust conspiracy claims.” Both in its orig-

inal submissions to the Fourth Circuit and on rehearing,

Grinnell’s only claim was instead that the District Court

had “ignored evidence supporting its claims.” Pet. App.

5a; Appellant’s Brief at 8-9; Petition for Rehearing at 1.

Indeed, in stating the governing principles, Grinnell

treated the Fourth Circuit’s decisions that do turn on,

and explicate, Matsushita’s discussion of the proper anti-

trust-law-specific summary judgment approach to ambigu-

ous evidence regarding an illegal conspiracy as entirely

correct. Appellant’s Reply Brief at 11-12.

Thus, even assuming that the “heightened proof stand-

ard” issue were somehow relevant to the decision of this

case, it is far too late in the day for Grinnell to raise this

issue in this Court for the first time. For the Court will

not consider, as a question presented for certiorari, an

issue that was “neither raised nor considered by the

Court of Appeals.” Adickes v. S.H. Kress Co., 398 U.S.

144, 147 n.2 (1970) (citations omitted). And. the

“routine restatement and application of settled law” gov-

9

erning antitrust case summary judgments by the Fourth

Circuit here, see Pet. App. 4a, where there was no “real

contest” on the point, does not suffice to preserve the

issue for certiorari. Illinois vy. Gates, 462 U.S. 213, 222-

223, (1983). See also, e.g., Auer v. Robbins, 519 U.S.

452, ——, 117 S.Ct. 905, 912 (1997).

(c) While we believe the foregoing is dispositive, we

would be derelict if we failed to point out that Grinnell,

in its need to try to create the appearance of disarray in

the court of appeals law on Matsushita’s antitrust-law-

specific summary judgment approach tortures the rele-

vant Fourth Circuit jurisprudence beyond recognition.

The most recent full Fourth Circuit statement of the

governing summary judgment principles in antitrust cases

is set out in Thompson Everett, Inc. v. National Cable

Advert. L.P., 57 F.3d 1317 (4th Cir. 1995), upon which

the District Court, Pet. App. 18a-19a, and the Fourth

Circuit, Pet. App. 4a, relied below. In that case, the

plaintiff-appellant argued that the district court had erred

in granting summary judgment to the defendant-appellee

by “yielding too readily to the defendants because of a

mistaken belief that such preference should be given in

antitrust cases.” 57 F.3d at 1322.

The Fourth Circuit, in rejecting that contention, re-

sponded by setting out the proper practice on such sum-

mary judgment motions:

While Rule 56 is to be applied to antitrust cases

no differently from how it is applied to other cases,

that is not to say that the summary judgment device

is not an appropriate and useful tool for resolving

antitrust cases. On the contrary, because of the un-

usual entanglement of legal and factual issues fre-

quently presented in antitrust cases, the task of sort-

ing them out may be particularly well-suited for Rule

56 utilization. The summary judgment practice does

not become disfavored simply because a case is com-

10

plex. Rather, it is favored as a mechanism to secure |

the “just, speedy and inexpensive determination” of .

a case, see Fed.R.Civ.P. 1, when its proper use can i

avoid the cost of irial. See also Celotex Corp. v. |

Catrett, 477 U.S. 317, 327 (1986). While it is axio- |

matic that Rule 56 must be used carefully so as not

improperly to foreclose trial on genuinely disputed,

material facts, the mere existence of some disputed

facts does not require that a case go to trial. The

disputed facts must be material to an issue necessary

for the proper resolution of the case, and the quality

and quantity of the evidence offered to create a ques-

tion of fact must be adequate to support a jury

verdict. See Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 252 (1986). Thus, if the evidence is

“merely colorable” or “not significantly probative.”

it may not be adequate to oppose entry of summary

judgment. 7d. at 249-50. [57 F.3d at 1322-1323.]

As to the drawing of inferences from the record evi-

dence the Court of Appeals added:

While we have recognized generally that when con-

sidering a motion for summary judgment, the dis-

trict court must “draw any permissible inference from

the underlying facts in the light most favorable to

the party opposing the motion,” Tuck v. Henkel

Corp., 973 F.2d 371, 374 (4th Cir. 1992), cert.

denied, —— USS. , cae Geet, Sar tee

L.Ed.2d 671 (1993), we hasten to add that those

inferences must, in every case, fall within the range

of reasonable probability and not be so tenuous as

to amount to speculation or conjecture. See Sylvia

Development Corp. v. Calvert County, 48 F.3d 810,

817 (4th Cir. 1995). Moreover, the inferences

which may be drawn vary from one substantive area

of the law to another. Thus, on summary judgment

motions in antitrust cases, the Supreme Court has

instructed that when there is evidence of conduct

that is consistent with both legitimate competition

and an illegal conspiracy, courts may not infer that

aac

11

an illegal conspiracy has occurred without other evi-

dence. See Matsushita Elec. Indus. Co. v. Zenith

Radio Corp., 475 U.S. 574, 588 (1986).

At bottom, the district court must determine

whether the party opposing the motion for summary

judgment has presented genuinely disputed facts

which remain to be tried. [57 F.3d at 1323.]

The foregoing, we submit, makes it perfectly plain that,

contrary to Grinnell’s submission, the Fourth Circuit has

not read Matsushita as a license to adopt a special “rigor-

ous and restrictive” antitrust summary judgment standard.

Rather, consistent with Eastman Kodak Co. v. Image

Tech. Servs., Inc., 504 U.S. 541, 468-469 (1992), the

Fourth Circuit recognizes that Matsushita “did not intro-

duce a special burden on plaintiffs facing summary judg-

ment in antitrust cases” and “demands only that the non-

moving party’s inferences be reasonable in order to reach

the jury. . .” 2

2Grinnell similarly overreads the Seventh Circuit case law.

Grinnell cites Serfecz v. Jewel Food Stores, 67 F.3d 591 (7th Cir.

1995), cert. denied, U.S. ——, 116 S.Ct. 1042 (1996) as the

most recent Seventh Circuit case reading Matsushita as authoriz-

ing the “impos[ition of] a heightened evidentiary burden” on anti-

trust plaintiffs opposing summary judgment. Pet. 13-14. But

Serfecz imposes no such burden. Rather the Serfecz decision, like

the Fourth Circuit’s Thompson Everett decision, gives Matsushita

a straightforward reading consistent with basic Rule 56 principles:

The evidence of record fails to show that, if the case were

submitted to a trier of fact, there would be sufficient evidence

to justify a judgment for the plaintiffs. Although, at the

summary judgment stage, we must evaluate the record so as to

give the nonmoving party the benefit of the doubt on all rea-

sonable inferences that may be drawn from that record, we are

not permitted to allow a case built on a metaphysical doubt to

go to the jury. Matsushita, 475 U.S. at 586-87. Here the plain-

tiffs’ case is built on a metaphysical doubt on a metaphysical

doubt. There is simply no evidence that precludes the possibil-

ity of independent action. Jd. at 597 n.21. In this context, the

absence of that evidence deprives the plaintiffs of a reasonable

12

What this case comes down to in this regard, as both

the District Court and Court of Appeals held—after the

most careful scrutiny of the record—is that there is no

record evidence of the alleged combination or conspiracy

cas” that would support a jury verdict. Alvord-Polk, Inc. v.

F. Schumacher & Co., 37 F.3d 996, 1000-01 (3d Cir. 1994),

cert. denied, USS. , 115 S.Ct. 1691, (1995); see

Eastman Kodak, 504 U.S. at 468-77. [67 F.3d at 602]

Indeed, while Grinnell claims that the Seventh Circuit antitrust

summary judgment decisions are in “direct contrast” with those

of the Third Circuit, Serfecz (as the foregoing quotation shows)

cites with approval, and follows, the most recent Third Circuit deci-

sion in point—Alvord-Polk, Inc. v. F. Schumacher & Co., supra,

(cited by Grinnell at Pet. 16).

Grinnell seeks to make much of the Eighth Circuit’s rejection of

the plaintiff argument that Matsushita’s antitrust-law-specific sum-

mary judgment approach “does not apply ... [where! the con-

spiracy ... allege[{d] served defendants’ economic interest”—on

the ground that the Eighth Circuit “read[s] Matsushita more

broadly.” Corner Pocket of Sioux Falls v. Video Lottery, 123 F.3d

1107, 1109 (8th Cir. 1997), cert. denied, sub nom. Corner Pocket

of Sioux Falls v. Powerhouse Technologies, US. ——, 118

S.Ct. 1054 (1998). But this portion of Corner Pocket does not show

that the Eighth Circuit has adopted the “heightened evidentiary

burden” reading of Matsushita Grinnell attributes to that court.

All Corner Pocket (and its precursors) do is hold, quite unexcep-

tionably, that “where the objectively observable market conditions

are consistent with defendant’s assertions .. . that [the defendant]

acted unilaterally . . . and independently . . . absent additional

evidence of concerted action, the market conditions emphasized by

plaintiffs do not prove that ‘the inference of conspiracy is reason-

able in light of the competing inference[] of independent action.’ ”

23 F.3d at 1112 quoting Matsushita, 475 U.S. at 588. That holding

all but tracks Matsushita rather than adding to it.

Grinnell’s attempt to create a circuit conflict out of Jn Re Coer-

dinated Pretrial Proceedings, 906 F.2d 432 (9th Cir. 1990) is

equally faulty. Grinnell emphasizes that the Ninth Circuit rejected

the proposition that Matsushita “‘suggest[s] that a district court

may grant summary judgment to antitrust defendants whenever the

court concludes that inferences of conspiracy and inferences of

innocent conduct are equally plausible,” 906 F.2d at 438—a proposi-

tion not adopted by any court of appeals. And, Grinnel does so in

order to suggest that the Ninth Circuit gives Matsushita a nar-

rower scope than other circuits. Grinnell is much more reticent in

sre neti wi Ste

ay ee

13

that generates any such “reasonable . . . inferences.”

And, this Court does not sit to review careful district

court factfindings carefully reviewed and affirmed by a

court of appeals. General Talking Pictures Corp. v. West-

ern Electric Co., 304 U.S. 175, 178 (1937) (“granting

of the writ would not be warranted merely to review the

evidence or inferences drawn from it”); Rudolph v. U.S.,

370 U.S. 269, 270 (1962) (dismissing writ of certiorari,

and stating that, where the appellate court approved the

district court’s findings of fact, “their review [by the

Court] would be of no importance save to the litigants

themselves.” )

quoting the Ninth Circuit’s statement of what Matsushita does

“suggest.” And, for the most obvious reason—what the Ninth

Circuit said in that regard is directly in line with the rest of the

court of appeals case law:

Thus, Matsushita establishes that a trial judge should not

permit an inference of antitrust conspiracy from circumstan-

tial evidence where to do so would have the effect of deterring

significant procompetitive conduct. We emphasize, however, that

an antitrust defendant is not entitled to summary judgment

simply by virtue of the fact that the plaintiff’s inference of con-

spiracy would have some deterrent effects; the effects must be

significant. As the Court stated in Matsushita, the concern

with avoiding deterrent effects “must be balanced against the

desire that illegal conspiracies be identified and punished.” 475

U.S. at 594. In short, the trial court must consider whethcr,

on the evidence presented, the protection of innocent independ-

ent conduct outweighs the costs associated with the potential

decrease in strict antitrust enforcement. If it does, then the

plaintiff must come forward with additional, “sufficiently unam-

biguous” evidence that does not have these undesirable deter-

rent effects. Jd., at 597-98 & n.21. [906 F.2d at 439; see also

id. at 440 and 447]

The sum of the matter is that taking into account the nuances

created by natural differences in judicial writing styles, the courts

of appeals restatements of, and elaborations on, Matsushita are, in

their essentials, remarkably uniform. Certaintly there are no dif-

ferences that come anywhere close to creating a circuit conflict.

Thus, Grinnell’s conflict argument is doubly defective—it pertains

to an issue not presented by this case and it is unsound in its

own terms.

14

II.

As secondary grounds for the grant of its certiorari

petition, Grinnell argues that the District Court mis-

understood and misapplied the nonstatutory labor exemp-

tion to the antitrust laws as well as the substantive re-

quirements of a Pennington antitrust claim.

Grinnell contends first that the District Court’s deter-

mination that the nonstatutory exemption applies to the

Unions’ unilateral “job targeting” allocation decisions is

inconsistent with the proper test for applying the exemp-

tion stated in Mackey v. National Football League, 543

F.2d 606, 614 (8th Cir. 1976). Pet. 20-22.

Second, Grinnell posits that, in abiding by this Court’s

instruction, in Brown v. Pro Football, Inc., 518 U.S. 231,

245-250 (1996), not to second-guess the subjective

motives of parties in collective bargaining, the District

Court transgressed the principles enunciated in United

Mine Workers v. Pennington, 381 U.S. 657 (1965). Pet.

22-25.

And, third, Grinnell claims that the District Court

erred in stating the requirements of an actionable Penning-

ton antitrust claim. Pet. 25-29.

Grinnell is wrong in each regard, and it follows that

neither the nonstatutory exemption question raised in the

certiorari petition nor the Pennington question is worthy

of this Court’s review.

(a) Rather than departing from the Mackey v. Na-

tional Football League nonstatutory labor exemption test,

as Grinnell claims, the District Court expressly followed

Mackey:

The test to be applied in a case such as this one

is that recognized by several circuit courts. Under

that test, the parties to an agreement restraining

trade are exempt from antitrust liability if (1) the

restraint primarily affects the parties to the agree-

15

ment and no one else; (2) the agreement concerns

wages, hours or conditions of employment that are

mandatory subjects of collective bargaining, and (3)

the agreement is produced from bona fide arms-

length collective bargaining. Phoenix Elec. Co. v.

National Elec. Contractors Ass'n, 81 F.3d 858, 861

(9th Cir. 1996); Mackey v. National Football

League, 543 F.2d 606, 614 (8th Cir. 1976). [Pet.

App. 32a. ]

Applying that test to Grinnell’s hypothetical conspiracy

between the Unions and NFSA to withdraw targeting

from Grinnell—a conspiracy Grinnel was in any event

unable to prove—the District Court expressly found the

three Mackey factors to be present. Pet. App. 32a-33a.

That Grinnell finds fault with the District Court’s

application of the Mackey test to the particular facts of

this case does not establish a circuit conflict or create an

issue of law for this Court’s consideration. Indeed, the

Eighth Circuit itself recently applied its Mackey test to

uphold a union targeting program against antitrust claims.

See Local Union 257, Int'l Bhd. of Elec. Workers v.

Sebastian Elec., 121 F.3d 1180, 1186 (8th Cir. 1997).

And in this regard, the Eighth Circuit followed the lead

of the Ninth Circuit in Phoenix Elec. Co. v. National

Elec. Contractors Ass'n, supra (targeting program pro-

tected by nonstatutory exemption).

(b) Grinnell’s claim that this Court’s decisions in

Brown v. Pro Football League and Pennington are some-

how inconsistent and that the District Court’s citation,

and application, of Brown to a Pennington antitrust claim

undermines the Pennington decision is insubstantial.

The Brown Court cautioned district courts sitting in

antitrust cases not to second-guess the “true purpose” or

“subjective motive” of a party engaged in collective bar-

gaining. 518 U.S. at 245-250. As the District Court

recognized, that caution is perfectly consistent with Pen-

nington’s holding that the labor exemption does not apply

16

when it is “clearly shown” that a union has agreed with

one set of employers to impose a particular wage scale

on others while recognizing that it is “beyond question”

that a union may conclude a wage agreement with a

multiemployer group and, as a matter of its own policy,

seek the same wages from others. 381 U.S. at 663.

Thus, under Brown and Pennington, correctly read, the

District Court properly rejected Grinnell’s invitation to

divine some hidden agenda in the collective bargaining

negotiations between the Unions and NFSA, in the ab-

sence of any evidence suggesting such an agenda. The

District Court repeatedly noted that evidence simply “does

not exist” that the Unions conspired with NFSA in bar-

gaining to deny more favorable terms to Grinnell. Pet.

App. 27a, 29a, 30a.

(c) Grinnell is on no stronger ground in attacking the

District Court’s reliance on Smitty Baker Coal Co. v.

United Mine Workers, 620 F.2d 416 (4th Cir. 1980) in

defining an actionable Pennington anti-trust combination

Or conspiracy to impose terms and conditions on third

party employers through collective bargaining.*

Smitty Baker rests on a painstaking review of the three-

part decision in Pennington as well as the post-Penning-

ton judicial authority and commentary, and on the basis

of that review, concludes

To amount to an antitrust violation the agreement

must be rooted in an anti-competitive purpose, and

must effect an anti-competitive result, as evidenced

by action “ruining” a competitor’s business or driving

him “out of business.” [620 F.2d at 431-32.]

3 While we treat with Grinnell’s Pennington claim question on

its merits in text we emphasize that in the context of this case

that question is entirely hypothetical. The District Court found

as a fact that “evidence does not exist that any [Union-NFSA]

agreement [to impose terms and conditions on Grinnell] was ever

reached.” Pet. App. 29a.

17

In recognizing this “predatory intent” element, Smitty

Baker follows the lower courts’ reading and application

of Pennington on remand. See Lewis v. Pennington, 400

F.2d 806, 813-14 (6th Cir.), cert. denied, 398 U.S.

960 (1968). And as Grinnell acknowledges, “the Fifth,

Sixth and Seventh Circuits have likewise held that sub-

stantive claims under Pennington require a showing of

predatory intent to drive the competitor out of business.

Pet. 26, n.8. See, e.g., James R. Snyder Co. v. Associ-

ated Gen. Contractors of Am., 677 F.2d 1111, 1120 (6th

Cir. 1982); Embry-Riddle Aeronautical Univ. v. Ross

Aviation, Inc., 504 F.2d 896, 903 (Sth Cir. 1974); Asso-

ciated Milk Dealers, Inc. v. Milk Drivers Union, 422

F.2d 546, 554 (7th Cir. 1970).

We know of no court of appeals decision to the con-

trary. Larry V. Muko, Inc. v. Southwestern Pa. Bldg. &

Constr. Trades Council, 670 F.2d 421 (3d Cir. 1982)—

the one case cited by Grinnell as such—is inapposite.

As the Third Circuit noted in its earlier opinion in that

litigation, the Muko case was predicated on antitrust

claims arising wholly outside of a collective bargaining

relationship. See Larry V. Muko, Inc. v. Southwestern

Pa. Bldg. & Constr. Trades Council, 609 F.2d 1368,

1373 (3d Cir. 1979). —-

So far as our researches and those of Grinnell show,

then, the courts of appeals are in complete accord on the

proper reading and application of Pennington to alleged

antitrust combinations or conspiracies to impose terms

and conditions on third party employers through collec-

tive bargaining. Accordingly, the decision below in this

regard raises no question for review in this Court.

18

CONCLUSION

The petition should be denied.

Respectfully submitted,

WILLIAM W. OSBORNE, JR.

(Counsel of Record

for Local 669)

One Thomas Circle, N.W.

Washington, D.C. 20005

(202) 955-3800

SALLY M. TEDROW

(Counsel of Record

for United Association)

4748 Wisconsin Avenue, N.W.

Washington, D.C. 20016

(202) 362-0041

LAURENCE GOLD

1000 Connecticut Ave., N.W.

Washington, D.C, 20036