In a major decision recently issued by the Third Circuit Court of Appeals, the court lowered the standard for Plaintiffs in proving price fixing in antitrust litigation. In In re Flat Glass Anti-Trust Litigation, 385 F.3d 350 (3d Cir. 2004), the court reversed the decision of the lower court granting summary judgment in favor of a defendant in an anti-trust class action where the plaintiffs alleged that five of the primary manufacturers of glass in the United States conspired to fix prices from 1991 to 1995 for glass made for use in residential and commercial construction as well as for automobiles. The lower court found that summary judgment should be granted in the defendant’s favor because it found no data which indicated that the prices paid by glass purchasers rose during the period in question. The lower court also found that even though the manufacturers’ prices were similar during the same periods of time this was not in and of itself indicative that a price fixing conspiracy was taking place.
The Third Circuit Court of Appeals affirmed the lower court’s decision regarding the automotive glass business. It nevertheless reversed the lower court regarding the architectural glass business holding that the defendant manufacturer could not sufficiently prove on summary judgment that there was no conspiracy to fix glass prices. The court conclusively rejected the argument that transactional prices must rise in order to prove that price fixing has occurred because an agreement to fix prices is per se violation of the Sherman Act. The court found that Defendants repeatedly raised list prices with an intended effect of rasing transactional prices. Though the transactional prices did not rise, this had no effect on whether the conspiracy did or did not exist.
The court performed a detailed factual analysis, finding that the evidence was sufficient to provide a finder of fact with a reasonable basis to conclude that there was a price conspiracy. There were several instances where the manufacturers issued price increase announcements for approximately the same amounts and in approximately the same time period. In addition, on several occasions, announcements regarding the price increases occurred immediately after the upper level executives of the conspirators held joint meetings. The court held that even though the content of such meetings was largely unknown, the fact that the meetings existed served as an adverse inference against the defendant manufacturer. Finally, the court looked to several internal documents of the conspirators which accurately predicted the price increases well before they were announced. Based on these findings, the court held that there was sufficient evidence in the record to prove that the defendant conspired with the other manufacturers to fix prices.
In the past plaintiffs had an extremely high hurdle to get over for summary judgment in anti-trust cases based on circumstantial evidence because courts did not want to stifle or discourage competition in the marketplace. The Flat Glass decision seems to suggest that the Third Circuit may be moving in another direction.