Amicus Curiae Brief — Hahnaman Albrecht, Inc. v. Potash Corp. of Saskatchewan

# Supreme Court, U.S.

No. 99-1844 FILED

In The JUN 1 6 2000

Supreme Court of the United States

: CLERK

HAHNAMAN ALBRECHT, INC., et al.,

Petitioners,

vV.

POTASH CORPORATION OF

SASKATCHEWAN, INC., et al.,

Respondents.

¢

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Eighth Circuit

¢

BRIEF OF AMICI CURIAE STATES OF ALABAMA,

ARKANSAS, CALIFORNIA, COLORADO,

CONNECTICUT, DELAWARE, DISTRICT OF

COLUMBIA, FLORIDA, HAWAII, IDAHO, IOWA,

KANSAS, LOUISIANA, MAINE, MARYLAND,

MICHIGAN, MINNESOTA, MISSISSIPPI,

MISSOURI, NEW HAMPSHIRE, NEW MEXICO,

NEW YORK, NEVADA, NORTH CAROLINA,

NORTH DAKOTA, NORTHERN MARIANA

ISLANDS, OHIO, PENNSYLVANIA, PUERTO RICO,

SOUTH CAROLINA, SOUTH DAKOTA, TEXAS,

VERMONT, AND WEST VIRGINIA,

IN SUP’ORT OF PETITIONERS

¢

Mark Pryor Mike Hatcu

Attorney General Attorney General

*TERESA BROWN Jutie Ratston AOKI

Senior Assistant Assistant Attorney

Attorney General General

323 Center St., Ste. 200 445 Minnesota St., #1200

Little Rock, AR 72201 St. Paul, MN 55101-2130

(501) 682-3561 (651) 296-2622

*Counsel of Record

[Additional Counsel On Inside Cover]

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TABLE OF CONTENTS

Page

prt Be yy) by. ee nn rn ii

INTERESTS OF THE AMICI STATES............... 1

REASONS FOR GRANTING THE WRIT ........... 3

I 6 6o eee nek eee Rl eaivane se cekdawax ees +

I. THERE IS A WIDENING SPLIT IN THE CIR-

CUITS OVER THE PROPER SUMMARY JUDG-

MENT STANDARD TO BE APPLIED IN

ANTITRUST CONSPIRACY CASES............ +

Il. THIS ISSUE IS IMPORTANT BECAUSE THE

SUMMARY JUDGMENT STANDARD SET BY

THE EIGHTH AND NINTH CIRCUITS WILL

UNDULY ELIMINATE VALID ANTITRUST

Re Ne MEIN ass 00:45:45 Veen cau baassss 8

Ill. THE DECISION OF THE EIGHTH CIRCUIT

CONFLICTS WITH SUPREME COURT PRECE-

NUT <5 GEG EEN 5g 4K 0k Nan dons Dae hR Ras GORNS 10

ii

TABLE OF AUTHORITIES

FEDERAL CASES

Apex Oil Co. v. DiMauro, 822 F.2d 246 (2d Cir. 1987) ....

Continental Ore Co. v. Union Carbide & Carbide

ee ee ee ee re

Eastman Kodak Co. v. Image Tech. Servs., 504 U.S.

MER WRMOES OR hadewses eedisaet eNae ee es 8, 11,

ES Dev., Inc. v. RWM Enters., Inc., 939 F.2d 547 (8th

Cat SE 6th deck See eae ek

Ezzo’s Invs., Inc. v. Royal Beauty Supply, Inc., 94

ee Se CU Se Bao 6 shh din np eek

Florida et al. v. Nine West Group, Inc., No. 00 Civ.

1707 (S.D.N.Y. filed March 6, 2000) ...........

Georgia v. Evans, 316 U.S. 159 (1942) ............

Georgia v. Pennsylvania R.R. Co., 324 U.S. 439

NES Saving 8 SEK a wha eek Ceca e es Rae POLIS

i ee roy ere perry tena a serene anny ey

In re Brand Name Prescription Drugs Litig., 123 F.3d

599 (7th Cir. 1997), cert. denied, 522 U.S. 1153

Ce EEE Eee Pe ee CO eye Ear Ee fr

In re: Citric Acid Litig., 191 F.3d 1090 (9th Cir. 1999)

In re Coordinated Pretrial Proceedings in Petroleum

Prods. Antitrust Litig., 906 F.2d 432 (9th Cir.

cg ee Perry Peroe re rr ens aire pe

Page

iii

TABLE OF AUTHORITIES - Continued

Page

In re Ins. Antitrust Litig., 938 F.2d 919 (9th Cir.

1991), aff'd in part, rev'd in part sub nom. Hartford

Fire Ins. Co. v. California, 509 U.S. 764 (1993)....... 1

In re Toys “R” Us Litig., 191 FR.D. 347 (E.D.N.Y.

REE ECE ORE ECC Or een Pree Fee ee 1

Local Union No. 189, Amalgamated Meat Cutters v.

pewel Tea Co., 36i US. G76 (96S) occ ec ciaaiss. 2

Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

fe | ee eevee rT Ter reer ers passim

Petruzzi’s IGA Supermarkets, Inc. v. Darling-Dela-

ware Co., 998 F.2d 1224 (3rd Cir. 1993)..... 6&4; 3: i2

STATE CASES

Carl N. Swenson Co. v. E.C. Braun Co., 272 Cal App.

2d 366, 77 Cal. Rep. 378 (Cal. Ct. App. 1969)...... 2

State v. Milwaukee Braves, Inc., 31 Wis. 2d 699, 144

OE We © SEs ck Son aud bewen cine sue bau e kak. 2

State by Humphrey v. Alpine Air Prods., Inc., 490

N.W.2d 888 (Minn. Ct. App. 1992), aff'd, 500

PE. Wee Fae CO TOW 6c ia Sie eiwddccccanes oa 2

X.L.O. Concrete Corp. v. Rivergate Corp., 83 N.Y.2d

Pee Ae POEs kwhkG aback s Venercnns saad ceadeaks 2

STATUTES AND RULES

Sr ee PEE ca cies Sen dkestdcslceus¥adsaenenan 4

iv

TABLE OF AUTHORITIES —- Continued

Page

PERIODICALS

Editors, Judges Versus Juries in Antitrust: Rush to

Summary Judgment, 20 Antitrust L. & Econ. Rev.

Se es es Bee kb ace her ca ce mane kes eee 9

Thomas Greene et al., State Antitrust Law and

Enforcement, PractisinG Law Institute, 1117 PLI/

ee Le reer rere errr. 9

INTERESTS OF THE AMICI STATES

Under the rule adopted by the Eighth Circuit, anti-

trust suits alleging horizontal price-fixing will rarely sur-

vive the summary judgment stage if the suits are based

on circumstantial evidence. Because most horizontal

price-fixing cases must by necessity rely on such evi-

dence, the consequence of that rule - which the Ninth

Circuit has also adopted - is to create a virtually insur-

mountable barrier to the successful prosecution of one of

the most pernicious forms of conduct covered by the

antitrust laws. The thirty-four Amici States listed on the

front cover have a compelling interest in reversing that

incorrect holding, and in preserving the ability of anti-

trust plaintiffs and law enforcers to challenge horizontal

price-fixing conspiracies.

The undersigned Attorneys General are the chief law

enforcement officers of their states and are charged with

the duty of enforcing the antitrust laws. They accomplish

this in several ways. In their capacity as parens patriae,

they are authorized to bring federal antitrust actions on

behalf of citizens of their states.1 As counsel for states,

state agencies and political subdivisions, Attorneys Gen-

eral often file federal antitrust actions seeking damages

and injunctive relief.2 Further, Attorneys General are the

1 15 U.S.C. § 15 (1998). See Georgia v. Pennsylvania R.R. Co.,

324 U.S. 439 (1945) (acknowledging the common law parens

patriae authority of the States); In re Toys “R” Us Litig., 191 F.R.D.

347 (E.D.N.Y. 2000); and Florida et al. v. Nine West Group, Inc., No.

00 Civ. 1707 (S.D.N.Y. filed March 6, 2000).

2 See Georgia v. Evans, 316 U.S. 159 (1942); In re Ins. Antitrust

Litig., 938 F.2d 919 (9th Cir. 1991), aff'd in part, rev'd in part sub

nom. Hartford Fire Ins. Co. v. California, 509 U.S. 764 (1993).

primary public enforcers of state antitrust laws, which are

often interpreted in conformity with federal law. The

Amici States, through their Attorneys General, thus play

a major role in antitrust enforcement and have a substan-

tial interest in ensuring that federal antitrust laws are

interpreted in accordance with sound antitrust policy and

with this Court’s prior decisions.

The ability to prosecute conspiracies that unreason-

ably restrain trade when only circumstantial evidence of

conspiracy is available is of vital importance to the Attor-

neys General, particularly when such conspiracies are

between competitors to fix prices. A law enforcer or

plaintiff by necessity must generally rely on circumstan-

tial evidence and the inferences that may be drawn from

such evidence to prove an alleged conspiracy, as direct

evidence of conspiracy is rarely available.* Under the

Eighth Circuit’s decision, however, plaintiffs and law

‘enforcers would be rendered effectively unable to with-

stand summary judgment challenges so long as the proof

consists solely of circumstantial evidence.

The issues involved in this case are of major impor-

tance to the preservation of free competition. For that

3 See, e.g., Carl N. Swenson Co. v. E.C. Braun Co., 272 Cal.

App. 2d 366, 77 Cal. Rep. 378, 379-80 (Cal. Ct. App. 1969); State

by Humphrey v. Alpine Air Prods., Inc., 490 N.W.2d 888, 894

(Minn. Ct. App. 1992), aff'd, 500 N.W.2d 788 (Minn. 1993); X.L.O.

Concrete Corp. v. Rivergate Corp., 83 N.Y.2d 513, 518 (N.Y. 1994);

State v. Milwaukee Braves, Inc., 31 Wis. 2d 699, 144 N.W.2d 1

(1966).

+ See, e.g., Local Union No. 189, Amalgamated Meat Cutters v.

Jewel Tea Co., 381 U.S. 676, 720 (1965); accord ES Dev., Inc. v. RWM

Enters., Inc., 939 F.2d 547, 553-54 (8th Cir. 1991).

reason, and those set forth below, the Amici States

strongly urge this Court to grant the petition for cer-

tiorari.

REASONS FOR GRANTING THE WRIT

In Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

U.S. 574, 587 (1986), this Court held that “if the factual

context renders respondents’ claim implausible — if the

claim is one that simply makes no economic sense -

respondents must come forward with more persuasive

evidence to support their claim than would otherwise be

necessary.” The Eighth Circuit, in a 6-5 en banc decision,

has broadly extended Matsushita to cases in which the

claims make obvious economic sense, namely, claims of

horizontal price-fixing. In the case below, Petitioners

alleged that a dramatic 48% increase in the price of gran-

ular grade potash, which was industry-wide and long

enduring, was the result of a horizontal price-fixing

agreement.> The Eighth Circuit drastically limited the

inferences that can be drawn from circumstantial evi-

dence in such horizontal price-fixing cases, essentially

placing the burden on the plaintiffs to disprove - at the

summary judgment stage - the defendants’ proffered

explanations for the circumstantial evidence. Pet. App.

A-6 - A-19.

5 This percentage increase was calculated by comparing the

September 1987 price of $58.00 per ton for granular grade

potash to the January 1988 price of $86.00 per ton, although

prices varied somewhat during the course of the alleged

conspiracy. Pet. App. A-24.

As the dissent below stated: “Because conspirators

cannot be relied upon either to confess or to preserve

signed agreements memorializing their conspiracies, the

court’s requirement for direct evidence will substantially

eliminate antitrust conspiracy as a ground for recovery in

our circuit.” Pet. App. A-20. The Eighth Circuit’s opinion

conflicts with thoughtful decisions of the Third, Sixth and

Seventh Circuits, conflicts with the well established pre-

cedent of this Court, and limits the ability of state and

federal regulators to enforce the antitrust laws effectively.

For each of these reasons, certiorari should be granted.

+

ARGUMENT

I. THERE IS A WIDENING SPLIT IN THE CIRCUITS

OVER THE PROPER SUMMARY JUDGMENT

STANDARD TO BE APPLIED IN ANTITRUST

CONSPIRACY CASES.

In Matsushita, this Court addressed the standards of

proof necessary to survive a summary judgment motion

in a case alleging violations of Section 1 of the Sherman

Act, 15 U.S.C. § 1 (1998). Matsushita is recognized as

controlling precedent and cited extensively in antitrust

cases in which the proof offered of an alleged conspiracy

is circumstantial. However, the standards set forth in

Matsushita have been interpreted in divergent ways

among the circuits, resulting in conflicting opinions and

an uneven application of the law.

Matsushita involved allegations of a predatory pric-

ing scheme determined to be economically implausible.

In Matsushita, this Court acknowledged the well estab-

lished principle that when considering a motion for sum-

mary judgment, the court must view all facts and

inferences to be drawn from them in the light most favor-

able to the party opposing the motion.® This Court lim-

ited that well established principle by limiting the

inferences a court may draw from ambiguous evidence in

a case brought under Section 1. Emphasizing the impor-

tance of determining the economic plausibility of the

plaintiff’s theory in such a case, this Court cautioned:

It follows from_these settled principles that if

the factual context renders respondents’ claim

implausible - if the claim is one that simply

makes no economic sense - respondents must

come forward with more persuasive evidence to

support their claim than would otherwise be

necessary.

Matsushita, 475 U.S. at 587.

The case below involved allegations of horizontal

price-fixing, a per se violation of the antitrust laws. Unlike

the allegations of predatory pricing in Matsushita, the

plaintiffs’ theory in the case below - that defendants

agreed to raise prices and keep prices high — made eco-

nomic sense for the defendants. The Eighth Circuit,

although professing to rely on the holding in Matsushita,

failed to take into account the economic plausibility of

the plaintiffs’ theory when evaluating the circumstantial

evidence presented. Rather it required that the evidence

rise to the same level of proof as that required if the

theory had been economically implausible.

© See Matsushita, 475 U.S. at 588.

The Ninth Circuit took a similar stance in the recent

case of In re: Citric Acid Litig., 191 F.3d 1090, 1094-97 (9th

Cir. 1999). That case, like the case below, involved allega-

tions of horizontal price-fixing. Although the Ninth Cir-

cuit outlined what it considered to be the “two-part test”

of Matsushita,’ it failed to recognize the different eviden-

tiary standards applicable only when the plaintiffs’

claims are economically implausible.

In stark contrast to the Eighth and Ninth Circuits, the

Third, Sixth, and Seventh Circuits, relying on the lessons

of Matsushita, have taken into consideration the economic

plausibility of the plaintiff’s theory and recognized that

the permissible range of inferences should be greatly

restricted only if the theory is found to be economically

implausible.® See, e.g., Petruzzi’s IGA Supermarkets, Inc. v.

Darling-Delaware Co., 998 F.2d 1224, 1232-33 (3d Cir. 1993)

(citing to Matsushita as requiring “sufficiently unam-

biguous” evidence to support inferences of a predatory

7 In re: Citric Acid Litig., 191 F.3d at 1094.

8 Arguably, the Ninth Circuit’s decision in In re: Citric Acid

Litig., 191 F.3d 1090 (9th Cir. 1999) is inconsistent with its

decision in In re Coordinated Pretrial Proceedings in Petroleum

Prods. Antitrust Litig., 906 F.2d 432, 438-40 (9th Cir. 1990) (stating

that Matsushita should not be read to permit a court to grant

summary judgment for defendants whenever circumstantial

evidence is equally consistent with both inferences of

conspiracy and permissible conduct; rather, Matsushita merely

limits the range of inferences that can be drawn from

ambiguous evidence depending on the potential effects of such

inferences on procompetitive behavior). The internal disarray,

exemplified by these two Ninth Circuit decisions, in addition to

the split between circuits on this issue, demonstrates the need

for guidance by this Court.

pricing conspiracy when plaintiffs’ theory was implausi-

ble and carried the risk of restricting highly procompeti-

tive conduct (low prices)); Ezzo’s Invs., Inc. v. Royal Beauty

Supply, Inc., 94 F.3d 1032, 1036 (6th Cir. 1996) (distin-

guishing the price-fixing allegation at bar from Matsushita

by calling it the “classic anti-trust situation: an attempt to

avoid a competitive marketplace by setting prices at an

artificially high level”); In re Brand Name Prescription

Drugs Littg., 123 F.3d 599, 613-14 (7th Cir. 1997) (holding

that summary judgment for defendant drug manufac-

turers and wholesalers was inappropriate where drug

retailer plaintiffs’ theory that defendants conspired to fix

prices was plausible and supported by some evidence,

although defendants offered innocent interpretations for

the evidence), cert. denied, 522 U.S. 1153 (1998).

In Petruzzi’s, the Third Circuit compared the differ-

ence in the plausibility of the claims in that case, which

involved market allocation and bid rigging, with the

predatory pricing claim in Matsushita. The claims in

Petruzzi’s made “perfect economic sense” and warranted

“more liberal inferences from the evidence.” Petruzzi’s,

998 F.2d at 1232. The Third Circuit explicitly followed

Matsushita, concluding:

[T]wo important circumstances underlying the

Court’s decision in Matsushita were (1) that the

plaintiffs’ theory of conspiracy was implausible

and (2) that permitting an inference of antitrust

conspiracy in the circumstances ‘would have the

effect of deterring significant procompetitive

conduct.’ . . . Thus, the Court stated that the

acceptable inferences which can be drawn from

circumstantial evidence vary with the plau-

sibility of the plaintiffs’ theory and the dangers

associated with such inferences.

Petruzzi’s, 998 F.2d at 1232 (internal citation omitted)

(emphasis added in original).

Although not uniformly recognized by the circuits,

Matsushita clearly dictates that the range of permissible

inferences that can be drawn from circumstantial evi-

dence in antitrust conspiracy cases must differ according

to the economic plausibility of the plaintiff’s allegations.

The greater the economic implausibility and the more

likely that procompetitive conduct will be inhibited if

liberal inferences of illegal activity are drawn, the stricter

the scrutiny that must be given to the plaintiff’s evidence.

The failure of the Eighth and Ninth Circuits to conform to

this precedent will result in the unwarranted increase of

summary judgments, and rather than protecting procom-

petitive behavior, illegal anticompetitive behavior will go

unpunished. See Eastman Kodak Co. v. Image Tech. Servs.,

504 U.S. 451, 479 (1992). To ensure a level playing field for

all litigants regardless of the circuit in which their case is

filed, this Court should resolve the split in the circuits.

Il. THIS ISSUE IS IMPORTANT BECAUSE THE SUM-

MARY JUDGMENT STANDARD SET BY THE

EIGHTH AND NINTH CIRCUITS WILL UNDULY

ELIMINATE VALID ANTITRUST CONSPIRACY

CASES.

The determination of the proper summary judgment

standard in conspiracy cases based on circumstantial evi-

dence of conspiracy is extremely important. The very

nature of a conspiracy is to be clandestine. Thus, law

enforcers or injured parties usually must rely on circum-

stantial evidence —- and the reasonable inferences that can

be drawn from such evidence -— to establish the existence

of a conspiracy. If an antitrust plaintiff cannot rely on

circumstantial evidence of the alleged conspiracy (and

concomitant reasonable inferences) to carry the plaintiff

beyond the summary judgment stage in every case where

a defendant can articulate a possible non-conspiratorial

explanation for its conduct, such conspiracies will rarely

be successfully challenged or prosecuted. Obviously, any

defendant aware of the antitrust laws will try to disguise

activity that violates these laws as legal conduct to the

greatest extent possible. Consequently, a rule that sub-

stantially eliminates the utility of circumstantial evidence

would significantly hamper enforcement of Section 1 and

its state law analogs.

The summary judgment stage of an antitrust trial is

already a critical hurdle for substantial numbers of plain-

tiffs, particularly in federal court.? Expanding this stan-

dard unduly to foreclose the progress of difficult yet

meritorious cases simply because such cases are based on

circumstantial evidence will chill the public and private

9 See Thomas Greene et al., State Antitrust Law and

Enforcement, PractisinG Law Institute, 1117 PLI/Corp. 957, 980

(May-June 1999) (noting that “[t]he importance of summary

judgment in federal antitrust litigation cannot be minimized”);

and Editors, Judges Versus Juries in Antitrust: Rush to Summary

Judgment, 20 Antitrust L. & Econ. Rev. 1988 No. 2, at 1, 3 (noting

that a preliminary analysis indicated that between one-half to

two-thirds of the 142 antitrust cases decided in 1987 were won

by defendants at the summary judgment stage in federal court)

(cited in id.).

10

enforcement of the antitrust laws. Summary judgment is

an appropriate tool for culling out unsupported cases |

before they reach a factfinder. Yet, the summary judgment \!

standard employed by the Eighth and Ninth Circuits for

antitrust conspiracy cases raises the bar too high and is

untenable, given the importance of circumstantial evi-

dence in antitrust conspiracy cases.

Finally, the existence of a contract, combination or

conspiracy is a threshold requirement for price-fixing and

other violations of Section 1 and its state law analogs.

Obviously then, a legal standard that integrally affects

the ability of law enforcers and plaintiffs to establish the

existence of a conspiracy is of fundamental importance.

Resolution of the current circuit conflicts strongly

warrants grant of certiorari in this case. Specifically, the

range of circumstantial evidence, the detailed analysis by

the en banc court below, including the dissent, provides

this Court with an opportunity to write dispositively on

the treatment of various forms of classic circumstantial

evidence of conspiracy and how the concomitant infer-

ences should be drawn and weighed.

Ill. THE DECISION OF THE EIGHTH CIRCUIT CON-

FLICTS WITH SUPREME COURT PRECEDENT.

Matsushita imposed a heightened evidentiary stan-

dard when dealing with economically implausible allega-

tions. Although the Eighth Circuit professed to follow

Matsushita, it failed to address the economic plausibility

of the plaintiff’s allegations before, as the Eighth Circuit

put it, applying Matsushita “broadly” and summarily dis-

missing plaintiffs’ claims. Pet. App. A-7.

Te a en OT ee nen |

11

This Court reiterated the importance of ascertaining

the economic plausibility of an alleged antitrust claim in

evaluating the supporting evidence in the case of Eastman

Kodak Co. v. Image Tech. Servs., 504 U.S. 451 (1992). In

response to Kodak’s contention that it was entitled to a

legal presumption of lack of market power under the

reasoning in Matsushita, this Court stated:

Plaintiffs in Matsushita attempted to prove the

antitrust conspiracy ‘through evidence of

rebates and other price-cutting activities.’

Because cutting prices to increase business is

‘the very essence of competition,’ the Court was

concerned that mistaken inferences would be

‘especially costly’ and would ‘chill the very con-

duct the antitrust laws are designed to pro-

tect.’ .. . But the facts in this case are just the

opposite. The alleged conduct — higher service

prices and market foreclosure — is facially anti-

competitive and exactly the harm that antitrust

laws aim to prevent. In this situation, Matsushita

does not create any presumption in favor of

summary judgment for the defendant.

Kodak, 504 U.S. at 478 (citations omitted).

The horizontal price-fixing claims alleged by Peti-

tioners in the case below are also “facially anticompeti-

tive” and “exactly the harm that antitrust laws aim to

prevent.” Id. Yet, the Eighth Circuit neither addressed the

differences in the factual allegations present in the case

below and those in Matsushita, nor recognized the lessen-

ing of the evidentiary standards applicable to the evi-

dence in the case below. Although such reasoning may

result from the Eighth Circuit’s concern over deterring

procompetitive behavior, in actuality it may serve to raise

12

the evidentiary bar high enough to allow antitrust viola-

tors to slide summarily under it. This Court obviously

did not intend the reasoning in Matsushita to be taken to

such lengths.

In Kodak, the Court observed, “when we weigh the

risk of deterring procompetitive behavior by proceeding

to trial against the risk that illegal behavior will go

unpunished, the balance tips against summary judg-

ment.” Id. at 479. By failing to take into account the

economic plausibility of the claims alleged in the case

below, the Eighth Circuit unfairly tipped the scale back.

Finally, the Eighth Circuit’s piecemeal method of

analysis also conflicts with this Court’s prior precedent.

In Continental Ore Co. v. Union Carbide & Carbon Corp., 370

U.S. 690 (1962), an antitrust case involving alleged viola-

tions of Section 1 of the Sherman Act, this Court stressed

the necessity for evaluating the plaintiff's evidence of

conspiracy as a whole, stating:

In cases such as this, plaintiffs should be given

the full benefit of their proof without tightly

compartmentalizing the various factual compo-

nents and wiping the slate clean after scrutiny

of each. . . . [T]he character and effect of a

conspiracy are not to be judged by dismember-

ing it and viewing its separate parts, but only by

looking at it as a whole.

Id. at 699 (internal quotation marks and citation omitted).

Indeed, viewing the evidence as a whole is partic-

ularly important in cases involving allegations of conspir-

acy.

'

13

Seemingly innocent or ambiguous behavior can

give rise to a reasonable inference of conspiracy

in light of the background against which the

behavior takes place. Evidence can take on

added meaning when viewed in context with all

the circumstances surrounding a dispute.

Apex Oil Co. v. DiMauro, 822 F.2d 246, 255 (2d Cir. 1987).

In the case below, although the Eighth Circuit pro-

fessed to consider the proof as a whole, it actually evalu-

ated each portion of the evidence individually and

determined that each piece standing alone did not

“exclude the possibility of independent action by the

producers” or did not “rebut the producers’ independent

business justification for their actions.” Pet. App. A-9 -

A-16. This piecemeal approach is contrary to this Court’s

clear precedent.

For these reasons, the Amici States urge the Court to

grant certiorari. This Court should clarify that the appro-

priate analysis is exemplified by the Third Circuit's

approach in Petruzzi’s, 998 F.2d at 1231-33, in which the

range of acceptable inferences varies according to the

plausibility of a plaintiff’s theory and the dangers to

procompetitive conduct associated with such inferences.

Thus, the less plausible the theory or the greater the

dangers, the more unambiguous such evidence must be.

This approach represents a synthesis of the Matsushita

and Kodak decisions. Further, it reconciles the conflicting

demands of Fev. R. Civ. P. 56 standards and the policy

interests of courts and defendants in rooting out implau-

sible antitrust claims early in the judicial process. It also

provides a reasonable standard which will allow law

enforcers to effectively pursue civil law enforcement

14

actions against harmful price-fixing conspiracies under

the Sherman Act and state antitrust laws.

+

CONCLUSION

For the foregoing reasons, the Petition for Writ of

Certiorari sought by Hahnaman Albrecht, Inc., et al.

should be granted.

Respectfully submitted,

Mark Pryor

Attorney General

TeresA BROWN

Counsel of Record

Senior Assistant Attorney

General

323 Center St., Ste. 200

Little Rock, AR 72201

(501) 682-3561

Mike HatcH

Attorney General

Juure Ratston Aoki!

Assistant Attorney General

445 Minnesota St., #1200

St. Paul, MN 55101-2130

— (651) 296-2622