Keep Calm and Causation On: Reframing Causation Analysis in Private Section 1 Antitrust Actions at Summary Judgment

• Author: Anne E. Hartnett
• Position: J.D., The University of Iowa College of Law, 2017; B.A., Iowa State University, 2014
• Pages: 2291-2324

HARTNETT_PP_FINAL(DO NOT DELETE) 7/26/2017 12:04 AM

2291

Keep Calm and Causation On: Reframing

Causation Analysis in Private Section 1

Antitrust Actions at Summary Judgment

Anne E. Hartnett*

ABSTRACT: A private plaintiff’s ability to enforce antitrust violations

critically hinges upon proof that the plaintiff’s injury was in fact caused by

the defendant’s antitrust violation—a deceptively simple requirement. This

Note traces the history of the treatment of the causation element in private

Section 1 antitrust conspiracy claims, as well as the differing approaches

courts apply to the causation element when ruling on motions for summary

judgment in Section 1 cases. In particular, this Note elaborates on how the

adoption and use of the traditional tort law concept of causation in antitrust,

as well as the heightened standards found in unrelated antitrust inquiries,

has rendered federal courts incapable of properly examining economic

evidence of causation. This Note advocates for more procedurally prudent

court practices when assessing the causation element in pretrial rulings. Such

practices are intended to hold courts accountable for verifying that a Section

1 plaintiff has sound evidence of causation before a case reaches a jury, while

also ensuring that courts do not go beyond their role as gatekeepers when

ruling on motions for summary judgment.

I. INTRODUCTION ........................................................................... 2292

II. THE FUNDAMENTALS AND DEVELOPMENT OF CAUSATION

ANALYSIS IN SECTION 1 CASES AT SUMMARY JUDGMENT ............. 2294

A. LEGAL RULES FOR BRINGING AND WINNING A PRIVATE

SECTION 1 CONSPIRACY CLAIM .............................................. 2295

1. The Clayton Act’s Private Right of Enforcement ...... 2295

2. Section 1 Conspiracy Claims ...................................... 2297

B. THE EVER-ELUSIVE NATURE OF ANTITRUST CAUSATION .......... 2299

1. The Abstract Causation Element in Private

Antitrust Actions .......................................................... 2299

* J.D., The University of Iowa College of Law, 2017; B.A., Iowa State University, 2014.

Thank you to Professor Herbert Hovenkamp for sparking my interest in this complex and

fascinating topic. Thank you also to my friends and editors on the Iowa Law Review for their

thoughtful suggestions and help with this Note.

2292 IOWA LAW REVIEW [Vol. 102:2291

2. Antitrust Standing and its Effect on the Causation

Element ........................................................................ 2301

C. THE RISE OF SUMMARY JUDGMENT IN PRIVATE SECTION 1

CONSPIRACY CASES ................................................................ 2302

1. Summary Judgment Loses its Leniency ..................... 2302

2. Summary Judgment Post-Matsushita: Plaintiff’s

Friend Turned Foe ...................................................... 2303

III. THE TWO PRIMARY STANDARDS—AND CAUSES—OF IMPROPER

SECTION 1 CAUSATION ANALYSIS AT SUMMARY JUDGMENT ........ 2305

A. THE DEFERENTIAL APPROACH: A HISTORY OF PILING

INFERENCE UPON INFERENCE ................................................. 2305

1. The Original Distinction Between Causation and

Quantification ............................................................. 2307

2. How Bigelow’s Misinterpretation of Precedent

Formed the Zenith Radio Standard ............................. 2309

3. Too Great of Inferences ............................................. 2311

B. THE HEIGHTENED APPROACH: AN UNCLEAR VISION OF

CAUSATION-IN-FACT .............................................................. 2313

1. Misapplied Antitrust Standing and Injury

Concepts ...................................................................... 2315

2. Misunderstandings of Matsushita and Proof of

“Economic Plausibility” ............................................... 2316

IV. THE PROPER STANDARD OF ANALYSIS: RETURNING TO AN

ANALYSIS OF CAUSATION THAT REQUIRES ECONOMICALLY

SOUND THEORIES BASED IN FACTS ............................................. 2318

A. EXPRESSLY SEPARATING CAUSATION-IN-FACT IN SECTION 1

CLAIMS ................................................................................. 2318

B. RETURNING TO THE GATEKEEPING FUNCTION ......................... 2319

1. Focusing on Procedural Requirements Through

Economic Substance ................................................... 2320

2. Untangling “But-For” Causation from Material

Cause ............................................................................ 2322

V. CONCLUSION .............................................................................. 2323

I. INTRODUCTION

In the whole of civil litigation, arguably no party has a more difficult time

surviving a motion for summary judgment than a plaintiff alleging an injury

from a violation of the federal antitrust laws. Although the forms of antitrust

violations contain different elements, every private plaintiff must prove that

2017] KEEP CALM AND CAUSATION ON 2293

his or her injury was in fact caused by a defendant’s antitrust violation.1 While

establishing causation is universally required in all civil claims, attempting to

either prove or assess causation in the antitrust context is particularly

challenging. The difficulty of proving a causal connection is most often felt in

the context of motions for summary judgment, where even courts appear

unsure of what level and form of proof is required to satisfy the causation

element. Amidst this confusion, plaintiffs claiming a Section 1 conspiracy may

have to overcome an additional burden of proof—namely, that it is more

likely than not that the defendant in fact caused the plaintiff’s injury.2

As such, there is currently a large degree of inconsistent analysis and

outcomes in rulings on motions for summary judgment in Section 1 cases.

More specifically, two polar-opposite approaches have created a spectrum of

inconsistency: under the first, courts simply presume that a plaintiff has

sufficiently established a causal connection once the judge deems the other

elements can be reasonably inferred; and under the other, courts strictly

require a determination as to whether a plaintiff has proved a causal

connection to a reasonable certainty.3

In early 2014, this inconsistency came to light in a Sixth Circuit decision

that reversed a grant of summary judgment against dairy retailers who alleged

that a group of milk wholesalers had illegally fixed prices in violation of

Section 1 of the Sherman Act.4 While the district court found that the dairy

retailers’ expert failed to show that the alleged conspiracy did in fact cause

milk prices to increase,5 the court of appeals found that because the re was

enough evidence to reasonably infer a conspiracy and an unexplained rise in

prices and thus an injury, the price increase “clearly result[ed]” from the

price-fixing conspiracy.6 The defendants petitioned the Supreme Court to

1. See, e.g., El Aguila Food Prods., Inc. v. Gruma Corp., No. 04-20125, 2005 WL 1156090,

at *2 (5th Cir. May 17, 2005) (“The fact of damage requirement is one of causation; the plaintiff

must show that the defendant’s unlawful conduct was a material cause of injury to its business.”);

Abcor Corp. v. AM Int’l, Inc., 916 F.2d 924, 931 (4th Cir. 1990) (affirming summary judgment

because plaintiffs “failed to show a causal link to anticompetitive activity”).

2. See, e.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986)

(“To survive a motion for summary judgment 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 independently.” (quoting Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S.

752, 764 (1984))); Monsanto, 465 U.S. at 764 (“[S]omething more than evidence of complaints

is needed. There must be evidence that tends to exclude the possibility that the [two defendants]

were acting independently.”).

3. See infra Part III.

4. In re Se. Milk Antitrust Litig., 739 F.3d 262, 268 (6th Cir. 2014).

5. In re Se. Milk Antitrust Litig., No. 2:08–MD–1000, 2012 WL 1032797, at *6 (E.D. Tenn.

Mar. 27, 2012) (“Further, it appears to the Court that [the plaintiffs’ expert] cannot, and did

not, measure how prices would have increased in the absence of a conspiracy. He simply

compared pre-merger prices to post-merger prices. In short, [the expert’s] analysis does not

create a material issue of fact on the question of whether the price i ncreases were ‘by reason of’

an illegal conspiracy in violation of the antitrust laws . . . .”), rev’d, 739 F.3d 262 (6th Cir. 2014).

6. In re Se. Milk Antitrust Litig., 739 F.3d at 286 (“[W]hen competition is limited purs uant

to an agreement and customers are punished through higher prices, the in jury clearly results

from anticompetitive conduct.”).